Samsung's $20 Trillion US Foundry New Plant 'Countdown'... Taylor-si Likely

Vice Chairman Lee Jae-yong Makes Final Checks on North America Business Trip... Final Candidate Site Expected to be Confirmed

The Samsung flag is fluttering at the Samsung Seocho Building in Seocho-dong, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporters Heungsun Kim and Hyunjin Jung] Samsung Electronics has virtually selected Taylor City, Texas, as the final site for its second U.S. foundry (semiconductor contract manufacturing) plant, with an investment of $17 billion (approximately 20 trillion KRW). This comes after all incentive proposals negotiated with Taylor City, including tax reduction benefits, were approved. The business community expects the final candidate site to be confirmed within this month following Vice Chairman Jaeyong Lee's (face) North American business trip.

According to industry sources and foreign media on the 19th, the Taylor Independent School District (ISD) in Texas, which is being considered as a candidate site for Samsung Electronics' new plant, recently approved tax reduction incentives to attract the Samsung factory. At a meeting held on the 15th, the Taylor ISD resolved to provide tax reduction incentives worth a total of $292 million (approximately 344.2 billion KRW) if Samsung Electronics decides to invest in Taylor City. These incentives will be provided by reducing property taxes on the Samsung foundry plant.

All Incentive Proposals by Taylor Negotiators Approved
Most Property Taxes Reimbursed

Samsung Electronics has been negotiating incentives separately with three parties: Taylor City, Taylor Independent School District, and Williamson County, regarding the new plant site. Earlier, Williamson County and Taylor City held public hearings in September and unanimously approved tax benefits for Samsung Electronics. At that time, Williamson County promised to reimburse 90% of the property taxes Samsung would pay during the first 10 years and 85% during the following 10 years. Taylor City also finalized an incentive plan to reimburse most of Samsung Electronics' property taxes. With the recent Taylor ISD resolution, all negotiating parties in Taylor City have approved the incentive measures.

Earlier this year, Samsung Electronics showed signs of expanding its existing plant by changing the land use of the adjacent site next to its foundry production line in Austin, Texas. However, reports emerged that negotiations over tax incentives between Austin City and Samsung were facing difficulties, changing the atmosphere. Subsequently, it was confirmed in July that Samsung submitted an application requesting incentives not only to Austin City but also to Taylor City, which rapidly emerged as a candidate site.

On the other hand, Austin City did not make progress in incentive negotiations. Samsung Electronics applied for tax benefits to Austin earlier than Taylor City in January this year. The negotiating parties in these areas include Austin City, Travis County, and Manor Independent School District, but none have yet approved incentives. Recently, it was confirmed that Samsung withdrew its incentive application submitted to Manor ISD from the Texas state government website. As a result, the possibility of Taylor City being the final selected site has increased.

The New York Times reported, "Taylor City is filled with anticipation ahead of Samsung Electronics' foundry plant site selection," adding, "Residents' expectations are so high that real estate prices are moving just on the possibility of the factory being established."

Why Taylor for the Second U.S. Plant?
Close to Austin Plant... Effective for Maintaining Friendly Relations with the Local Community

The second U.S. foundry plant was officially announced when Samsung Electronics Vice Chairman Kihyun Kim revealed a $17 billion investment plan at the Korea-U.S. summit in May. So far, about five candidate locations, including Austin City, Taylor City, Arizona, and New York, have been considered.

Among the fiercely competing candidates, Taylor City showed the most proactive approach by publicizing and promptly approving incentive proposals. Another advantage is that Taylor City is about a 30-minute drive from Samsung's Austin plant. Once a semiconductor plant is established, creating a surrounding ecosystem is essential. Taylor City can utilize the existing infrastructure developed around the Austin plant, has nearby universities, and about half of the workforce holds college degrees, making it favorable for securing skilled talent. Additionally, it is suitable for maintaining friendly relations with the Texas state government and local community, with whom Samsung has had ties for over 20 years.

On the 14th, Vice Chairman Lee, who embarked on a North American business trip, met consecutively with Noubar Afeyan, co-founder and chairman of Moderna's board, and Hans Vestberg, CEO of Verizon, to discuss business plans in the bio and telecommunications sectors. Since Samsung announced plans in August to strengthen investments focusing on strategic businesses such as semiconductors, bio, next-generation communications, and artificial intelligence (AI), it is expected that the next step will be to review semiconductor-related issues.

The chartered plane used by Vice Chairman Lee for the trip was recently identified to have visited Washington. The industry speculates that he met with influential political and government figures there to discuss semiconductor investment and supply issues. An industry insider said, "Samsung Electronics has secured a considerable incentive proposal from Taylor City, and since competitors like TSMC and Intel have already announced U.S. investment plans, there is no reason to delay the site decision any longer," adding, "After Vice Chairman Lee reviews the final land matters, an announcement is expected soon."

This content was produced with the assistance of AI translation services.