South Korean tech giant, Samsung Electronics Co., is doubling down in Texas with another facility, about 30 miles from its manufacturing hub in Austin. The new Taylor facility will cost a whopping $17 billion and create 1,800 jobs. Chip production wouldn’t start until the second half of 2024.
WSJ said officials in Taylor incentivized Samsung by giving them “property-tax breaks of up to 92.5% for the first ten years, with the write-offs gradually declining over the next several decades.”
“A final decision has not yet been made regarding the location,” a Samsung spokeswoman said.
Samsung is taking advantage of the Biden administration’s effort to lure advanced manufacturing back to the U.S., especially semiconductor production, as global supply chains are being reworked around China.
In February, President Biden signed an executive order to address the global semiconductor chip shortage. “Make no mistake, we’re not simply planning to order up reports. We are planning to take actions to close gaps as we identify them,” an administration official said at the time.
Then in July, the Biden administration announced a “supply-chain disruptions task force” to identify bottlenecks. Secretary of Commerce Gina Raimondo has headed up the task force with the help of “Mayor Pete,” focused on semiconductors and other areas, including homebuilding and construction.
This year’s semiconductor shortage has been very disruptive to domestic manufacturing firms. The problem is that while U.S. semiconductor firms account for 47% of global chip sales, only 12% of production is domestic. In the 1990s, the U.S. accounted for 37% of the global output.
Is this move the beginning of Biden’s “Build Back Better” strategy working? Or is this reflective of a red state’s more-open and less-taxed status as being attractive for global competition? The U.S. is also seeking independence from China on large-capacity batteries for electric vehicles, rare earth minerals, and pharmaceuticals.
Tue, 11/23/2021 – 11:28
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Author: Tyler Durden