Arizona Emerging as a Strong Candidate
Following a recent semiconductor meeting at the White House, competition is heating up among U.S. states to attract Samsung Electronics' semiconductor plant worth US$17 billion. So far, Texas is considered the most likely candidate. But Arizona, which recently attracted new investments from global semiconductor giants TSMC and Intel, is rapidly emerging as a "dark horse."
Two sites in Arizona known as candidate sites for Samsung Electronics' semiconductor plant will be auctioned on April 21 (local time), according to foreign media reports. The sites have business facilities of Goodyear and Queen Creek, respectively. They are expected to sell for at least US$127.7 million and US$86.13 million, respectively. Both sites have been designated as foreign trade zones and repurposed to allow employment.
The reports say that Samsung Electronics was not directly mentioned in the related documents but that they clearly reflect the possibility of Samsung's investment. "Nothing has been decided regarding the site for the new factory," Samsung Electronics said in response.
Arizona has recently emerged as a hub for global semiconductor production. The state has enough motivation to actively attract Samsung Electronics' plant. It succeeded in attracting a US$12 billion semiconductor plant from Taiwan's TSMC in 2020. Intel also announced last month that it would invest US$20 billion to build two new plants in Arizona. If Samsung Electronics' plant is built here, Arizona will be able to solidify its position as a global semiconductor production hub. The Arizona state government is offering up to US$9,000 in tax credits for three years per job created. Phoenix of Arizona is in talks with Samsung over US$900 million in incentives.
However, Texas is still the strongest candidate. Since Samsung Electronics' semiconductor plant has already been operating in Austin since 1997, Texas has an advantage in terms of parts and raw materials supply. The Austin plant has an airport nearby, so the place is good for transporting products.
Samsung Electronics is currently negotiating with Austin over US$805.47 million in incentives over the next 20 years. Earlier, Texas put out an authoritative interpretation that it can offer a US$285 million tax cut over the next 15 years.
New York State also promised to offer Samsung Electronics unprecedented incentives. It proposed to provide US$900 million (about 1 trillion won) in incentives, including tax cuts and job subsidies, if Samsung builds a semiconductor plant. The proposed incentive of US$900 million is the largest-ever amount in New York State’s history.
Initially, Samsung was expected to make a decision on its investment as early as the first half of 2021. But some experts predict that the decision will come out earlier due to the White House meeting. Samsung Electronics may announce its decision next month, according to media reports.