Computer chip boom in US?
Officials in Ariz., NY, Texas see silver lining in shortage: A $17 billion Samsung plant
TAYLOR, Texas — The shortage of computer chips has zapped energy from the global economy, punishing industries as varied as automakers and medical device manufacturers and contributing to fears about high inflation.
But many states and cities in America are starting to see a silver lining: the possibility that efforts to sharply increase chip production in the United States will lead to a busy chip factory in their backyard. And they are racing to get a piece of the potential boom.
One of those towns is Taylor, a Texas city of about 17,000 about a 40-minute drive northeast of Austin. Leaders here are pulling out all the stops to get a $17 billion Samsung plant that the company plans to build in the United States starting early next year.
The city, its school district and the county plan to offer Samsung hundreds of millions of dollars in financial incentives, including tax rebates. The community also has arranged for water to be piped in from an adjacent county to be used by the plant. But Taylor is not alone.
Officials in Arizona and in New York are also trying to woo the company. So, too, are politicians in nearby Travis County, home to Austin, where Samsung already has a plant. Locations in all three states “offered robust property tax abatement” and funds to build out infrastructure for the plant, Samsung said in a filing.
Congress is considering whether to offer its own subsidies to chipmakers that build in the United States.
Where Samsung’s plant will land remains anyone’s guess. The company says it is still weighing where to put it.
The federal government has urged companies like Samsung, one of the world’s largest makers of the high-tech components, to build new plants in the United States, calling it an economic and national security imperative. Intel broke ground on two plants in Arizona in September and could announce the location for a planned manufacturing campus by the end of the year.
This could just be a warm-up act. The Senate passed a bill to provide chipmakers $52 billion in subsidies this year, a plan supported by the Biden administration that would be Washington’s biggest investment in industrial policy in decades. The House has yet to consider it. Nine governors said in a letter to congressional leaders that the funding would “provide a new, powerful tool in our states’ economic development toolboxes.”
In Taylor, even the possibility of Samsung’s arrival is generating hope.
Business owners say it would bring more patrons to the local brewery and to the quiet downtown. Parents think the factory’s cutting-edge assembly line would inspire the town’s high school students. Residents believe land prices would rise quickly; values have already edged up in recent months just on the possibility, one real estate agent said.
“Something like this can be a shot in the arm,” said Ian Davis, CEO of Texas Beer Co., which opened a taproom in downtown Taylor five years ago.
But Critics of corporate tax incentives say the money could be better spent on basic infrastructure and on public schools.
The vast majority of semiconductors — an industry that generated nearly $450 billion in revenue in 2020 — are made in Taiwan, South Korea and mainland China. The United States controls 12% of global production.