A view of Samsung Electronics’ Austin semiconductor plant.
“It must be attracted even by giving the incentives required by Samsung Electronics.”
The love call from Austin, Texas to Samsung Electronics, is hot. Recently, the news that Samsung Electronics is considering the expansion of a semiconductor plant here has put a lot of pressure on the local public opinion. This is because, instead of providing the 1 trillion won tax cuts requested by Samsung Electronics, the effect of revitalizing the local economy will be greater. Samsung Electronics is currently weighing 3 US and 1 South Korea as candidates for new semiconductor factories worth 19 trillion won.
Samsung rejects Austin’s offer, making calculations complicated
According to the industry on the 10th, Samsung Electronics recently requested a tax reduction of $85.47 million (900 billion won) over 25 years as a condition of investment for the expansion of a semiconductor factory worth 17 billion dollars (19.300 trillion won) in Austin, Texas. did. This is the largest investment and incentive ever in Texas history. If you listen to this proposal, Samsung Electronics’s proposal is to invest 19 trillion won around the consignment production (foundry) facility currently operating in Austin to build an additional factory. Samsung Electronics estimates that the economic effect of additional plant expansion alone will reach $8.64 billion (1.0 trillion won).
A mega project promoted in Austin, Texas, in the last 5 years
Initially, the construction of Samsung Electronics’ Austin plant seemed to go smoothly. However, as it is known that Samsung Electronics rejected the incentive offer of $650 million (KRW 730 billion, 10 years tax benefit) proposed by Austin City, it is in a difficult state. As Samsung Electronics announced that it is reviewing four candidate sites, including Austin, New York City, Phoenix, Arizona, and South Korea as candidates, the calculation method in Texas has also become complicated. Foreign media said, “With this attraction of Samsung Electronics, Texas incentive policy has been put to the test.” Earlier, Texas, which has a similar form of painful memory, is in trouble.
“Samsung Electronics incentives, a good means of regional economic growth”
Texas, 20 years ago, was forced to drop a large Intel plant in Arizona, rejecting preferential treatment in the state legislature related to Intel’s new semiconductor plant. Texas has introduced a tax incentive program known as’Chapter 313′ after this incident. The gist of Chapter 313 is to reduce property taxes for 10 years when investments or jobs are created over a certain scale. In light of this, it is clear that Samsung Electronics’ demand for a 25-year tax cut is unprecedented.
Nevertheless, there is strong public opinion that the mistakes 20 years ago should not be repeated in the local area. Tony Bennett, president of the Texas Manufacturing Association and Dale Cramer, the president of the Texas Taxpayers Association, said in a recent contribution titled’The incentives given to Samsung Electronics are worthwhile.’ “The use of incentives will not weaken the tax base, but will be a good means of growing the local economy.” It is the diagnosis that’win-win’ is to offer unprecedented incentives and attract Samsung Electronics. Community Impact, an Austin regional newspaper, responded in an expert interview, saying, “Through incentives, goals such as revitalizing the local economy can be solved.”
In fact, competition in incentives to attract large corporations in the United States is not unusual. When Amazon, the world’s largest e-commerce company, announced its second headquarters relocation in 2017, there was a massive incentive competition to attract Amazon in 200 cities including the United States, Canada and Mexico. I walked.
Gyeonggi Pyeongtaek site map finalist
Currently, discussions on expansion of Samsung Electronics’ Austin plant have been temporarily suspended due to shutdown (shutdown) due to heavy snowfall. However, considering its rival Taiwan’s TSMC investment schedule, it is predicted that Samsung Electronics will make a final choice sooner or later.
Although Samsung Electronics’ large-scale investment considers the U.S. business with the launch of the Biden administration, the possibility of entering Korea is not’zero’. In addition, the Democratic Party recently presented various gift packages such as tax benefits for Samsung Electronics’ relocation to its home country. Samsung Electronics’ semiconductor production base in Pyeongtaek, Gyeonggi-do, is on a scale of 1.13 million pyeong, and currently half of it is empty, and it is possible to use the site at any time.
Samsung Electronics Pyeongtaek Line 2, the world’s largest semiconductor factory. Provided by Samsung Electronics
An official from the semiconductor industry predicted, “As it is an investment of 20 trillion won, we will not finally choose Austin for the purchase of the site,” and “We will make a final decision based on the conditions proposed in four places.”
Kim Dong-wook reporter [email protected]
News directly edited by the Hankook Ilbo can also be viewed on Naver.
