Samsung to invest billions in Texas chip plan

The construction site of a Samsung Electronics chip manufacturing facility in Taylor, Texas [CITY OF TAYLOR]
The construction site of a Samsung Electronics chip manufacturing facility in Taylor, Texas [CITY OF TAYLOR]

Samsung Electronics submitted a long-term plan to invest a total of $192 billion and build 11 chip-making plants in Texas over the next few decades, according to its applications filed with Texas authorities.

The actual amount of investment is subject to change since corporations tend to overestimate their investment when applying for tax incentives.

The Korean chipmaker proposed building nine new plants in the Texan city of Taylor, setting an investment that could amount to $167.6 billion, in the documents made public on the Texas Comptroller website on Wednesday.

Another two plants were suggested in Austin, where the company already operates two factories, with an estimated $24.5 billion of spending.  

A spokesperson at Samsung Electronics said the decision is far from being finalized and is mainly intended to examine a possibility ahead of the expiration of a major tax incentive program by the end of this year.

“We currently do not have specific plans to build at this time. However, the Chapter 313 applications to the State of Texas are part of Samsung’s long-term plan to evaluate the viability of potentially building additional fabrication plants in the United States,” the spokesperson said.

Other chipmakers like NXP and Texas Instrument also filed applications for the Chapter 313 program.

The company made it clear that tax grants will be a critical factor in finalizing the decision.

“Due to the higher tax cost of operating in Texas, the appraised value limitation will be a determining factor. Without the appraised value limitation award, the company will not likely locate the project in Texas,” the filings read.

Some of the production lines could be up and running as early as 2034, and the remaining parts will be gradually constructed over the course of the next 10 years.

Further details were few and far between in the statements, only mentioning that the project is intended to build wafer fabrication facilities.

The existing plants in Austin and the first factory in Taylor are the so-called foundry fab that contract-manufactures chips based on designs from external clients.

Samsung Electronics last year picked Taylor to be the location to build the $17 billion chip plant that is currently under construction.  

Texas Gov. Greg Abbott was quick to celebrate the consideration.

“Close partnerships with companies like Samsung — who recognize the boundless possibilities Texas has to offer — are bringing greater opportunities to Texans, and this potential investment will bring billions of additional capital to continue growing our world-class business climate and diverse, highly-skilled workforce,” Abbott said in a statement on Thursday.