Photo: Ricardo B. Brazziell/American-Statesman
Samsung Electronics is considering Austin, Texas as one of the sites for a new $17 billion chip factory that could create 1,800 jobs. This location, among other factors, may be attractive due to the fact that Tesla's factory is located there. The company is an important customer of Samsung, as it buys chips for its cars.
Samsung intends to build a 7-million-square-foot, next-generation chip fabrication plant, which could be the next step in a new partnership with Tesla, according to filings with the Local Government Assistance & Economic Analysis Division in Austin on January 11. In late January, industry sources revealed that Tesla and Samsung would be collaborating to develop a new 5nm chip that will be the most advanced in the world. Samsung is currently supplying 14nm chips to Tesla.
The South Korean tech giant is seeking a combined $805.5 million in tax breaks over 20 years from Travis County and the City of Austin, as well as other tax breaks. In its filings, Samsung said that if Austin is selected, the company will begin construction in Q2 2021, and the plant will start operating in Q3 2023. The document refers to a site in the Manor school district, Travis County.
Source: Samsung filing
"Based on various factors, we are reviewing the possibility of expanding our semiconductor manufacturing facilities. A number of global locations, including multiple candidates within the US, are under consideration. However, no decision has been made at this time," the company said.
Austin is already home to Samsung's largest facility outside its South Korea headquarters. In October 2020, the company bought seven tracts of land totaling 257.5 acres near its existing Northeast Austin facility. In December, the company also requested a zoning change to allow for more industrial uses on three tracts. But in the document, Samsung said that it is also considering incentive offers from New York, Arizona, and another Texas-based site, according to state filings.
Samsung said in the filing that it plans to produce “advanced logic devices,” which could indicate that it is a new 5nm chip that is being co-developed with Tesla. This proximity of Samsung's new chip production plant to Tesla's Giga Texas could be a good deal between the companies.
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