Samsung Electronics’ Austin S2 foundry plant (existing plant). Hankyung DB
‘Project Silicon Silver’.
This is the name of a project related to the expansion of the Austin Foundry Plant in Texas, USA, which Samsung Electronics is planning. Last month, Samsung Electronics submitted a letter of intent for investment to the Texas government in the US and local governments near Austin. This 107-page document, in the name of the law firm in Austin, contains the size of Samsung Electronics’ investment, land use plan, employment plan, and tax reduction requests.
Although the document is stamped with CONFIDENTIAL, it can be viewed through Google search or the like. In fact, it was public. Global news agency Reuters and Austin local media Austin American-Statesman cited this document earlier this month to reveal detailed plans for Samsung Electronics’ Austin foundry expansion.
If conditions are met, a total of 19 trillion won will be invested from the second quarter
According to this document, Samsung Electronics presented a total investment of 17 billion dollars (about 19 trillion won) on the premise of investing in Austin. The investment amount consists of $5.69 billion in investment in building land, etc., and $9.93 billion in equipment investment. The site size is 640 acres (258,9988 m2, 78,3471 pyeong). Construction will commence in the second quarter of this year, and it is planned to be put into operation in the fourth quarter of 2023.
Samsung Electronics Austin Factory Location
Samsung Electronics presented the economic effect of the Austin expansion investment at $8.6 billion (about 9.7 trillion won). The direct economic effect is estimated to be about 5 billion dollars, and the indirect effect is estimated to be about 3.6 billion dollars. For example, in terms of factory construction alone, Samsung Electronics will lose 80% of the construction cost of $5.69 billion, or $4.55 billion, to the local construction company. 11,175 construction workers work every year, with a total direct salary of $2.7 billion Analyzed that it will occur.
Starting salary of 66254 dollars (74.6 million won)… Lower than the local average annual salary
A significant portion of the employment effect was also emphasized. Samsung Electronics estimated a total of 1,800 full-time employees at the new factory for 10 years after completion. Instead of hiring 1,800 people at a time, it will employ 305 people in the first year, 520 people in the second year, 290 people in the third year, 225 people in the fourth year, and 165 people in the fifth year.
What caught the eye was the’first salary’ of local factory workers that Samsung Electronics released. According to the document, Samsung Electronics presented an annual salary of ‘66,254 dollars’ for the first year of full-time employees. It is about 74.6 million won in Korean money. Whether it is before or after tax is not specified.
Compared to the local salary, it is not high. According to the document, Travis County, where Austin is located, has an average manufacturing annual salary of $108,459 for a year from the third quarter of 2019 to the second quarter of 2020. During the same period, Travis County’s average annual salary for all industries was $72,644. Of course, it should be taken into account that Samsung Electronics is’starting salary’ and the above figures are’average annual salary’. For reference, according to the Samsung Electronics Business Report, the average annual salary of Samsung Electronics’ domestic employees is 180 million won (as of 2019).
Request for tax reduction of $85.47 million (907 billion won) for 20 years
Samsung Electronics, emphasizing this economic effect, requested a’tax cut’ from the Austin and Travis County governments. “A 19 trillion won worth of investment can generate an economic effect of close to 10 trillion won, so please cut taxes.”
Samsung Electronics’ demand for tax reduction related to the Austin plant expansion
Samsung Electronics has proposed a tax cut deadline of 20 years. The tax required to be reduced for 20 years is ‘8547 million dollars’. Converted to Korean money, it is about 90.7 billion won. Samsung Electronics stressed, “If Texas’ high taxes are not resolved, we will consider building factories in New York, Arizona and Korea as an alternative.” It has not yet been decided whether Samsung Electronics will invest in the Austin plant. They are fighting fiercely with US local governments to invest in the best conditions at the best timing.
Reporter Hwang Jeong-soo [email protected]