Samsung picks Texas for new US chip factory

It has been reported that South Korean technology group Samsung Electronics has decided to build a new chip factory in the US state of Texas. This was reported by Bloomberg news agency based on insiders. The decision is expected to be announced later today. In doing so, the group will respond to Washington’s desire to make more chips on its soil and address the global shortage of semiconductors.

The new plant, which will be equipped with the latest ASML chip machinery, will be built in Taylor, Texas, about 50 miles from Samsung’s current large production center in Austin. The South Korean chip maker hopes to win over more US customers with the new plant and narrow the gap with Taiwanese rival TSMC.

The choice came after a meeting between Samsung CEO Lee Jae-yong, who was paroled in August from prison in which he was in a corruption case, with White House officials. They talked about ways to solve the global shortage of chips. In addition, it was about the possible support of the tech giant if it builds a factory in the United States. Competitors such as Intel and TSMC have also recently come up with plans to invest billions in new chip factories.

The new plant will increase Samsung’s already large presence in Austin. The company has so far invested nearly $17 billion (15.1 billion euros) in the sprawling Austin complex that has more than 3,000 employees. Samsung plans to invest another $17 billion and create about 1,800 jobs in the first decade.

By choosing Texas, Samsung is joining a growing number of companies relocating or expanding in the US state. Last year, electric car maker Tesla and technology companies Oracle and Hewlett Packard Enterprise announced they would move their headquarters to the country.

Samsung’s decision is seen as a victory for Republican Governor Greg Abbott, who has promoted a business-friendly tax environment in the state and is preparing to campaign for re-election in 2022. Texas pulled everything they could to persuade Samsung. For example, a company will have a 90 percent deduction on property taxes for the next 10 years and an 85 percent deduction for the next 10 years.