Samsung considers Austin for $17 bn chip plant, eyes tax breaks of at least $806 mn

Samsung Electronics Co Ltd is considering Austin, Texas, as one of the sites for a new $17 billion chip plant that the South Korean firm said could create 1,800 jobs, according to documents filed with Texas state officials.

The tech giant is seeking combined tax abatements of $805.5 million over 20 years from Travis County and the city of Austin, among other tax breaks, according to the documents.

Samsung said in its filings 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.

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"This project is highly competitive, and the company is looking at alternative sites in the US including Arizona and New York, as well as abroad in Korea...," Samsung said in the documents, adding that it is taking into account access to talent, chip ecosystem and speed to market in its evaluation of the sites.

Samsung's American customers for its contract manufacturing chip business include Tesla Inc, Qualcomm Inc and Nvidia.

Samsung's filing said it plans to make "advanced logic devices," meaning it would aim to make the smallest, fastest kinds of computing chips for customers. The company has an existing chip plant in Austin that makes computing chips.

In a statement to Reuters, Samsung confirmed it is considering expanding its chip facilities, but no decision has been made yet.

The documents say the project would involve building out 7 million square feet (650,000 square meters) of new space on a 640-acre (259-hectare) site that the company already owns.

U.S. Senate Majority Leader Charles E. Schumer, called on Samsung to put a factory in his home state of New York, pledging to work to secure federal incentives for the facility, which he said are key for U.S. to compete with China in boosting local chip production.

While Intel Corp makes such chips for itself in the United States, most contract manufacturers who make them for outside clients, such as Taiwan Semiconductor Manufacturing (TSMC) Co Ltd and Samsung, maintain most of their facilities in Taiwan and Korea, respectively.

TSMC, which counts Apple Inc among its major customers, last year disclosed plans for a $12 billion chip plant in Arizona expected to come online in 2024.

The filings with Texas officials were earlier reported by the Austin American-Statesman newspaper.