Samsung Reportedly Seeking US$1 Bil. Incentive Package
Samsung Electronics’ reported plan to set up a new foundry in the United States will have a local economic impact of US$8.6 billion over its first 20 years of operation, according to documents filed by the company with the U.S. State of Texas.
Foreign media outlets, including Austin American-Statesman and Reuters, reported on Feb. 4 (local time) that Austin, Texas, is one of a number of locations under consideration by Samsung Electronics for its US$17 billion new semiconductor plant.
According to the reports, Samsung is seeking an incentive package worth more than US$1 billion to choose Austin for the new facility.
Austin American-Statesman reported that Samsung wants a 100 percent tax abatement over 20 years from Travis County, which would be worth $718.3 million. Samsung is also seeking 50 percent tax abatement from the city of Austin that would be worth US$87.2 million over five year.
Samsung Electronics is also seeking an incentive agreement on a US$252.9 million cut in property tax with the Manor school district in Texas.
Citing an expert, the media outlet said a 100 percent tax cut was unprecedented and that the tax cut will be compromised at the 70 to 80 percent level during negotiations between Travis County and Samsung Electronics.
In the documents, Samsung Electronics proposed building a 7-million-square-foot plant on a 640-acre site in Austin. The plant will produce advanced logic devices for computers. Samsung Electronics has been operating a semiconductor assembly plant in Austin since 1997.
In addition, the Korean chipmaker is evaluating other areas including Arizona and New York in terms of human resource accessibility and semiconductor ecosystems. If and when Austin is finalized as the home of the plant, Samsung will start construction in the second quarter and begin operating the plant in the third quarter of 2023.
Samsung Electronics stressed that the new factory will create 1,800 jobs and have a local economic impact of US$8.6 billion over the next 20 years. The new plant's employees will receive an average annual salary of US$66,254 per employee.
"Based on various factors, we are reviewing the possibility of expanding our semiconductor manufacturing facilities. A number of global locations, including multiple candidates within the U.S., are under consideration. However, no decision has been made at this time," the company said.
"We have not received a formal application from Samsung," a Travis County spokesperson was quoted as saying.