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Why Samsung Is Requesting $1 Billion In Incentive From Austin, Texas

Samsung is requesting a billion dollars in tax incentives to make Austin, Texas the home of the company’s $17 billion chip factory in the future.


The documents filed in January 2021 show that the company plans to bring 1,800 permanent jobs to the factory in the first 10 years with an average starting salary of around $66K per year.


The company is in return asking for a tax break on its property. It wants a 100 percent break on its payments to Travis County for 20 years.


Samsung estimates this would save it around $718 million. It also wants a 50 percent break on the taxes to the City of Austin for five years, estimated at $87 million.

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The company calls the project “highly competitive,” and says that “[d]ue to the higher tax cost of operating in Texas, the appraised value limitation is a determining factor. Without the appraised value limitation award, the company would likely locate the project in Arizona, New York or Korea”.


Samsung already has a chip-making plant in Austin. If it would be situating it there, it would most likely be expanding the existing plant which has been there since 1997.


At the moment, the factory currently employs around 10,000 people. If the Austin American-Statesman is to go by, Samsung recently bought 257.7 acres of land near its existing factory, meaning it might favour an expansion.


Austin is also home to Tesla’s plant and it would be interesting to see how the city reacts to Samsung’s offer. It is expected that some negotiation and its not fully expected that the company will get all it’s demanding.



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Kolawole Awolope

Passionate about talking, passionate about talking tech.

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