Texas city offers Samsung ‘major tax breaks’ for building chip factory

The Texas city of Taylor plans to offer Samsung “big tax breaks” if the company builds a chip factory near the city. Taylor is one of two locations Samsung is considering to build a $17 billion US chip factory.

Taylor would compete with Austin, the capital of Texas, for the construction of the factory, Reuters news agency reported. The plant is expected to create 1,800 jobs in the region. At the same time, Samsung would also be looking at other potential locations in Arizona and New York. The other possible locations have not yet shared details about their possible subsidy plans.

Reuters writes that the city of Taylor has proposed to grant Samsung a subsidy equivalent to 92.5 percent of real estate taxes over the next ten years. The next ten years, that subsidy would amount to 90 percent and then Samsung would receive 85 percent of the real estate tax as a subsidy for another ten years.

The city would also offer a 92.5 percent tax exemption for new real estate that Samsung builds on the potential site during the first ten years. Taylor would also repay the costs of the development research to Samsung. The proposed resolution will be considered Wednesday by the Taylor City Council and Williamson County commissioners, Reuters reports.

If Samsung chooses Taylor, the company plans to start construction in the first quarter of next year. Chip production should then start at the site at the end of 2024, Reuters writes, based on a document previously submitted to Texas government officials. Earlier this year there were rumors that Samsung would consider building a 3nm chip factory in Texas.

Samsung’s potential expansion plans follow US plans to potentially invest up to $52 billion in chip manufacturing within the region. A lobby group of chip companies has already called on the White House to invest billions in the American chip sector. The European Commission also wants to focus on chip production within Europe, in order to be less dependent on the chip production hotspots in Asia.