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Samsung chooses Taylor for plant

Kara Carlson

Austin American-Statesman USA TODAY NETWORK

Taylor, a small town of about 17,000 northeast of Austin, is poised to become a player in the global high-tech industry after Samsung picked it as the location for the company’s planned $17 billion advanced semiconductor factory. Samsung made the announcement Tuesday evening, along with Gov. Greg Abbott, nearly a year after the South Korea-based chipmaker was first reported to be searching for a site for a new fabrication facility.

“Samsung’s new semiconductor manufacturing facility in Taylor will bring countless opportunities for hardworking Central Texans and their families and will play a major role in our state’s continued exceptionalism in the semiconductor industry,” Abbott said.

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Kinam Kim, Samsung’s vice chairman and CEO of its Electronics Device Solutions division, said the Taylor facility would be key to “laying the groundwork for another important chapter in our future.”

“With greater manufacturing capacity, we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain,” he said.

Austin, where Samsung has its lone U.S. manufacturing plant, was in the running, as were locations in New York and Arizona.

But Samsung’s search ultimately landed on Taylor, in Williamson County, which has plentiful land for the project and where city, county and school district officials aggressively pursued it with incentive packages worth hundreds of millions of dollars combined.

Abbott’s office said Samsung would also receive $27 million in incentives from the Texas Enterprise Fund, a dealclosing tool used by the governor’s office.

Samsung intends to build a 6 millionsquare- foot next-generation plant that will be its most advanced factory, boosting the company’s ability to compete in the global chip market.

The company is expected to build on more than 1,000 acres southwest of downtown Taylor, near U.S. 79 and County Road 401. Samsung expects to invest $6 billion in buildings and property improvements and $11 billion in machinery and equipment for the facility, which is expected to be operational by 2024 and employ more than 2,000 people. Construction is expected to start early next year.

Ed Latson, executive director of the Austin Regional Manufacturers Association, said the selection of Taylor is a win for the entire region.

“A facility of this magnitude is a generational investment that will make a dramatic economic impact in the community and change lives by creating high-paying jobs for Texans at all education levels,” Latson said. “And the technology being produced will keep us at the leading edge of innovation in electronics.”

Matt Patton, an economist with Austin- based Angelou Economics, said the Samsung factory will be an “economic engine” for Taylor that will fuel substantial new housing development in and around the small city, as well as new restaurants, hotels and other businesses.

“It’s huge — it’s paradigm-shift kind of investment” for Taylor, Patton said. “That kind of money moves the needle no matter where you are.”

Samsung’s plans also will benefit Travis County and Austin, he said, albeit not as significantly as if the plant had been built within their boundaries.

Throughout its search for a location, Samsung said it was evaluating factors that included access to talent, proximity to existing semiconductor manufacturers, speed to market — and the availability of incentives from local government entities.

Williamson County and Taylor did the most among the potential sites in approving incentive packages. The Taylor Independent School District OK’d a deal that could provide about $300 million in tax savings, and Williamson County and the city of Taylor previously had approved incentives that could be worth $350 million combined to Samsung over the first 10 years and more in later years.

Meanwhile, in Travis County, government agencies had not approved any incentive agreements for Samsung. According to documents filed with the state earlier this year, Samsung had been seeking tax breaks from the city of Austin valued at $872.5 million over 20 years, from Travis County valued at $610.5 million over 20 years and from the Manor Independent School District valued at $285.5 million over 10 years.

Austin initially was considered a front-runner for the new plant because Samsung has room for expansion next to its existing manufacturing plant. The city has been home to Samsung’s largest operation outside of its South Korea headquarters and its only U.S. manufacturing facility since 1997. Samsung’s existing facility employs about 10,000 people, including 3,000 Samsung workers, and it has an Austin-based research and development facility.

Landing the new Samsung facility adds to a series of recent wins for the Central Texas economy. In December, Oracle announced it was moving its headquarters to Austin, and Tesla announced in October that it would do the same, less than a year after last summer’s announcement that it would build a $1.1 billion manufacturing facility in Travis County.

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