Samsung Semiconductor Plant Request
As we have previously noted, Samsung Electronics (005930.KS) is considering building a new semiconductor plant in the US. The company has been shopping for potential sites in Arizona and New York, however a recent filings in Austin, Texas, where the company already has a fab, indicates that Samsung is looking for ~$805.5m in tax abatements over a 20 year period ($40.275m average) from Travis County and the City of Austin to develop a 640 acre plot that the company already owns. Late last year Samsung purchased a 258 acre plot near its existing Austin location and filed development plans for the site.
As expectations are that construction is expected to begin in 2Q, Samsung will have to make a decision relatively soon if they want to keep to a timeline that will allow the fab to begin semiconductor production in 3Q 2023, so we expect similar negotiations are happening with local and state governments in the other possible locations. The documents indicate that Samsung expects to hire 1,800 employees over the next ten years for the plant, with the necessity for being able to draw qualified engineers from higher education institutions nearby. With the possibility of still building the fab in South Korea, we expect Samsung has a great deal of leverage in the negotiations with US cities, but if recent history has proven one thing, it is that ‘plans change’ as they did in Wisconsin where Foxconn (2354.TT) was planning to build a Gen 10 LCD fab, now severely scaled down to almost nothing.
As expectations are that construction is expected to begin in 2Q, Samsung will have to make a decision relatively soon if they want to keep to a timeline that will allow the fab to begin semiconductor production in 3Q 2023, so we expect similar negotiations are happening with local and state governments in the other possible locations. The documents indicate that Samsung expects to hire 1,800 employees over the next ten years for the plant, with the necessity for being able to draw qualified engineers from higher education institutions nearby. With the possibility of still building the fab in South Korea, we expect Samsung has a great deal of leverage in the negotiations with US cities, but if recent history has proven one thing, it is that ‘plans change’ as they did in Wisconsin where Foxconn (2354.TT) was planning to build a Gen 10 LCD fab, now severely scaled down to almost nothing.
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