Investment plan

Samsung Electronics unveils $200 billion U.S. investment plan

Samsung Electronics Vice President Lee Jae-yong (second from left) escorts US President Joe Biden (third from left) and Korean President Yoon Suk-yeol (fourth from left) as the two leaders visit the the company’s semiconductor plant in Pyeongtaek, Gyeonggi Province. May 20.

Samsung Electronics has proposed an investment plan of around US$200 billion in the United States over the next 20 years. It is a large-scale investment plan that includes the construction of 11 new semiconductor production lines in Texas.

The company submitted a tax benefit request to the Texas state government on July 20, according to reports from the Wall Street Journal (WSJ) and local media in Austin, Texas on July 22 (local time). Samsung Electronics proposed to add two production lines in Austin and nine production lines in Taylor.

The total proposed investment is $192.1 billion (about 252.6 trillion won). The plan calls for investing $167 billion (about 220.4 trillion won) to build nine production lines at Taylor and $24.5 billion (about 32.2 trillion won) to expand two production lines at Austin.

Samsung Electronics explained in the application that 10,000 new jobs will be created through this project. Some production lines are expected to be completed around 2034, with others to be completed sequentially over the next 10 years, but the exact schedule has been disclosed.

The big investment plan became known as the Texas State Board of Public Accountancy announced on its website that Samsung Electronics’ Chapter 313 application had been approved by the Taylor Independent School District (ISD) and Manor ISD, where the existing Austin plant is located.

Chapter 313 is a tax incentive program that provides 10-year property tax relief to businesses that create jobs through investments above a certain amount. Some analysts say Samsung submitted the application to seize the tax benefit opportunity which is due to disappear later this year.

In May this year, Samsung Electronics announced a plan to invest a total of 450 trillion won, including 360 trillion won in Korea, over the next five years. At the time, Lee said, “I’m risking my life to invest. I have no idea what the number means. I’m just going to move on.”

This investment plan is also expected to support the passage of the US Semiconductor Support Act, which aims to provide US$52 billion (about 68 trillion won) in subsidies and incentives to companies building production facilities. semiconductors in the United States. Congress is expected to pass the bill by the end of July at the earliest. If global corporate investment becomes visible, Congress will expedite the bill to consolidate investment in the United States. Samsung Electronics announced in November 2021 that it would invest US$17 billion (about 22 trillion won) to build a new semiconductor foundry in Taylor, Texas.