Samsung’s Chip Facility Plans
The South Korean tech company had first made public considerations of a chip facility plan back in January with reports talking about a business project in Texas worth about $10 billion. However, since then, the company has made significant developments in its plan and possible business potential. The intention of the chip facility has been to keep up with the ongoing chip shortages around the world as well as compete at a higher level with the likes of Taiwan Semiconductor Manufacturing Co. (TMSC).
The business project is now reported to be a $17 billion investment from the company, with $5.1 billion going directly toward buildings and property upgrades. Additionally, $9.9 billion will be used to improve machinery, equipment, and other technology. The aptly named Silicon Silver project would also create 1,800 jobs over the first ten years, making it an economic asset to whatever location Samsung chooses.
While the company does hope for property tax abatements worth around $1.5 billion over the course of 20 years, the business potential for most regions is still incredibly high. In fact, the direct and indirect economic output would be roughly $8.6 billion, adding tremendously to local economies and tax revenue.
Possible Location and Other Details
While it largely appeared that Austin, Texas was going to be the location based on a filing in January and the already operating chip facility in the city, other locations have been put into consideration. Outside of the United States (US), South Korea remains the largest potential location, though expectations remain that the company will choose a US city.
As it stands, two different locations in Arizona and one in New York remain the largest threats to Austin for the chip facility, as each appears to be offering similar tax breaks along with grants and refundable tax credits. All locations seem to be willing to provide strong breaks for the company as the additional business of the chip facility would far outweigh the losses.
As demand for chips ramps up with supply still low, Samsung is trying to make the most of the business opportunity, understanding the major upside it offers to any of these locations. If the company does choose Austin, Samsung would most likely break ground in Q2 of 2021, with the facility up and running by Q4 of 2023.
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.