The city of Taylor, Texas, is planning to offer Samsung extensive property tax breaks if the company chooses to establish its new $17 billion chip plant there.
The South Korean tech giant is currently considering Taylor, as well as Austin, Texas, as a site for a new chip plant that the firm says could create around 1,800 jobs in the region, Reuters reported. Samsung has said it’s also looking at potential sites in Arizona and New York.
As of yet, none of the other sites have disclosed any potential tax incentives they might offer the company.
According to a proposed resolution posted on the Taylor city website, the city is set to offer Samsung a grant for the land it will use equivalent to 92.5 percent of assessed property tax for 10 years, 90 percent for the following 10 years, and then 85 percent in the 10 years after that.
Additionally, the city will potentially offer a 92.5 percent tax waiver on new property built on the site for 10 years and the repayment of development review costs.
The proposal (pdf) will be considered on Sept. 8 by the Taylor City Council and Williamson County Commissioners.
The site in Taylor is situated around 25 miles from Austin and measures 1,187.5 acres in size, making it much bigger than the proposed Austin site.
Last October, Samsung purchased roughly 258 acres in Austin near its campus off East Parmar Lane, which are in addition to 350 acres it owns that include its sole U.S. chip factory.
The firm said in documents filed with Texas state officials that if Austin is selected, the company would break ground on the site in the second quarter of this year and that the plant will become operational in the third quarter of 2023.
Samsung’s U.S. customers for its contract manufacturing chip business include Tesla, Qualcomm, and Nvidia.
Samsung’s filing said it plans to make “advanced logic devices,” meaning it would aim to make the smallest, fastest kind of computing chips for customers. The company has an existing chip plant in Austin that makes computing chips.
While Samsung has given no hints as to where it may establish its new $17 billion chip plant, the competition is fierce amid increased demand for consumer electronics that rely on computer chips, also known as semiconductors.
In May, U.S. Senate Majority Leader Chuck Schumer (D-N.Y.) called on Samsung to put a factory in his home state of New York, on the STAMP campus in the western part of the state.
Schumer pledged to work to secure $52 billion in federal incentives to ensure that “new semiconductor fabs like this are built in New York,” in an effort to compete with China in boosting local chip production.
Schumer noted that the United States has gone to producing just 12 percent of the world’s semiconductors from 24 percent in 2000, while China, by comparison, has gone from producing zero chips to 16 percent of the world’s supply because the United States isn’t matching the investments that other competing nations are making.
In May, South Korea announced it would introduce bigger tax breaks and 1 trillion won ($883 million) in loans across its manufacturing industry to try to alleviate the global chip crisis.
In a statement, the Ministry of Trade, Industry, and Energy said the country will increase tax breaks to 6 percent from the current 3 percent or lower for capital expenditures between the second half of 2021 to 2024 for large corporations conducting “key strategic technology,” including semiconductors.