If federal subsidies are added to city government tax cuts, 4.8 trillion won is expected
(Seoul = Yonhap News) Reporter Kim Chul-seon = Samsung Electronics[005930]As Samsung recently officially announced its US$17 billion (about 20 trillion won) investment in the second US foundry plant, attention is also focused on the amount of incentives Samsung will receive from the US.
(Seoul = Yonhap News) Samsung Electronics announced on the 23rd (local time) that it had finally selected Taylor City, Texas, as the site for the construction of a new foundry semiconductor production line in the United States. In the photo, Texas Governor Greg Abbott and Samsung Electronics Vice Chairman Ki-Nam Kim (right) shake hands at a press conference on the same day. 2021.11.24
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According to industry sources on the 28th, the subsidies that Samsung Electronics can receive in relation to this investment in the United States are divided into state and city government incentives and federal government subsidies.
After negotiating incentives with several candidates in Texas, Arizona, and New York, Samsung finally chose Taylor City, Texas.
Initially, the city of Austin, Texas, where Samsung’s first foundry factory is located, was a strong candidate for the second factory, but the city of Taylor, adjacent to Austin, was selected by Samsung as it promised an unprecedented tax cut.
In September, Taylor City decided to reduce the property tax on land used by Samsung Electronics by 92.5% for the first 10 years, 90% for the next 10 years, and 85% for the next 10 years.
In addition, the Taylor City Independent School District has agreed to exempt $300 million from education taxes, and the Texas State Government has provided $27 million for job creation through the Texas Industry Fund (TEF). decided to provide subsidies for
When all these are combined, the total benefit is said to be worth 1 billion dollars (about 1.2 trillion won).
(Seoul = Yonhap News) Samsung Electronics has finally selected Taylor City, Texas, as the site for the construction of a new foundry semiconductor production line in the United States. The photo shows Samsung Electronics Vice Chairman Kim Ki-nam (second from right in the front row) taking a commemorative photo at a press conference held at the Texas governor’s residence on the 23rd (local time). On this day, Si-Young Choi, president of Samsung Electronics’ Foundry Business Division, Senator John Connin, Texas Governor Greg Abbott, Mayor Brant Rydell Taylor, Representative John Carter, Representative Michael McCall, and Williamson County Mayor Bill Gravel attended the event. 2021.11.24 [삼성전자 제공. 재판매 및 DB 금지] photo@yna.co.kr
In addition, Samsung is expected to receive semiconductor investment subsidies from the US federal government.
The U.S. Innovation Competition Act, which provides a total of $250 billion (about 300 trillion won) for semiconductors, 5G, artificial intelligence (AI), and quantum science in the U.S., passed the U.S. Senate in June and is currently under consideration in the House of Representatives. .
This bill was prepared to foster industrial technology, which is highly competitive with China, and is also called the ‘Anti-China Check-In Act’.
Specifically, a budget of $39 billion (about 47 trillion won) has been set for the semiconductor industry investment incentive program for five years from 2022, and up to $3 billion (about 3.6 trillion won) is supported for each investment case.
When Samsung announced its investment in the second foundry on the 24th, the US Department of Commerce as well as the White House gave a welcome statement.
Separately, a bill was proposed in the U.S. Senate in June to provide a tax credit of up to 25% on investments in semiconductor facilities and equipment.
(Seoul = Yonhap News) Samsung Electronics Vice Chairman Jae-yong Lee is answering questions from reporters after returning from a business trip to the United States and returning to Korea through the Seoul Gimpo Business Aviation Center on November 24. [연합뉴스 자료사진]
Samsung Electronics Vice Chairman Lee Jae-yong is reported to have requested cooperation for the passage of the semiconductor support bill and incentives for semiconductor investment during a recent meeting with key White House advisers and members of the Congress during a business trip to the United States.
Samsung Securities[016360] Analyst Hwang Min-seong said, “Samsung Electronics is expected to receive about $4 billion (about 4.8 trillion won) of support from the US federal government’s semiconductor project, city government’s property tax refund, and indirect incentives such as water and electricity.”
Recently, as the global competition for hegemony in semiconductors has intensified, the US, Europe, China, and Japan are competitively offering semiconductor support measures to attract domestic semiconductor investment.
It is known that Japan is planning to provide a subsidy of about 400 billion yen (about 4.2 trillion won) to Taiwan’s TSMC, the global leader in the foundry industry, for an investment of 800 billion yen (about 8.4 trillion won) in its semiconductor plant.
Korea also announced the ‘K-Semiconductor Strategy’ in May to foster the domestic semiconductor industry, but it is pointed out that the tax deduction rate for semiconductor facility investment by large companies such as Samsung Electronics is only 6%, which is still insufficient compared to its competitors.
An official from the Semiconductor Industry Association said, “The competition between countries to attract semiconductor investment is intensifying, but domestic support is still insufficient. “He said.
kcs@yna.co.kr
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