Samsung Electronics is expanding its investments in the United States, actively responding to the “friendshoring” pursued by US President Biden. Friendhoring is an attempt to reorganize global supply chains disrupted by Russia’s invasion of Ukraine in cooperation with allies and partners.
Samsung Electronics said on a second-quarter earnings conference call that it will reconsider near-term investments in facilities as global economic uncertainties will increase further in the second half of this year. But he added that he would steadily increase investment in the United States.
The company operates two semiconductor plants in Austin, Texas. In November last year, it decided to build a new factory in Taylor, Texas, at a cost of $17 billion. Currently, it is planned to start construction work soon. The planned factory in Taylor is 40 km from the factory in Austin, Texas. It will produce chips for 5G, artificial intelligence (AI) and high-performance computing (HPC) devices. The Taylor plant is about five million square feet, about four times larger than the current Austin plant.
In addition, Samsung Electronics recently disclosed its plan for further investment in semiconductors through a tax benefits application submitted to the Texas state government. It plans to establish 11 semiconductor factories in Texas by investing US$192.1 billion over the next 20 years.
The company said it would invest $167.6 billion to build nine new factories in Taylor and another $24.5 billion to create two factories in Austin. When implemented as planned, the program will create approximately 10,000 jobs. Some factories will be completed around 2034 and enter production, with the others to be built over the next 10 years.
The US state of Texas is implementing Chapter 313, an incentive program that provides 10 years of tax relief for investments of a certain amount or more, but the program will expire later this year. Since some benefits are not provided if an investment plan is not disclosed, Samsung seems to have applied for the program with a future investment plan.
Industry watchers say the Korean government needs to closely monitor the direction of future investment from global semiconductor companies, as there is a strong possibility that planned investment in Korea will be diverted to the United States as the US Congress passed the US$52 billion Semiconductor Support Act.
“Recently, the Korean government announced that it will increase the tax credit for large enterprise plant investment from 6-10% to 8-12%, but this policy is not enough,” said one. industry analyst. “It is high time for the Korean government to grant many more benefits to Korean companies as Korea’s rival countries such as the US, EU and Japan expand their incentives.