Korean electronics giant Samsung has chosen the Texan town of Taylor for its second semiconductor fabrication plant (fab) in the US, worth $17bn, the company announced on November 23.

The project is Texas’s biggest foreign direct investment (FDI) and the country’s second biggest FDI since records began in 2003, according to fDi Markets. 

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Taylor emerged as the winner of a race that started in January against the state of New York, Arizona’s capital Phoenix, and nearby Austin, which hosts Samsung’s existing US fab.

“As we add a new facility in Taylor, Samsung is laying the groundwork for another important chapter in our future,” said Kinam Kim, CEO of Samsung Electronics Device Solutions Division, in a statement published on November 23. “With greater manufacturing capacity, we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain.”

Construction on the five million-square-metre site will begin in the first half of 2022 with production starting before end-2024. The project will create more than 2000 tech jobs plus thousands of indirect jobs in the city of just 18,000 people, the company expects. 

Taylor’s mayor Brandt Rydell described the investment as “the single most significant and consequential development for the local economy” in more than two centuries. 

The newest fab for the world’s biggest chipmaker by revenue will manufacture products for use in advanced technologies such as 5G, high-performance computing and artificial intelligence.

Texas governor Greg Abbott credited the state’s “world-class business climate and exceptional workforce” in securing the deal. Samsung said its decision was based on the local semiconductor ecosystem, government support and community development opportunities. 

The company also cited the fact Taylor sits just 25 kilometres from Austin, where it has been manufacturing chips since 1996. The proximity allows Samsung to share infrastructure and resources between the two plants.

Williamson county offered Samsung an incentive package that includes a 90% property tax break over the first decade and 85% over the subsequent decade if investment and job targets are met. Local media estimate this will save Samsung up to $350m in the first 10 years alone. The state has also given Samsung a $27m grant for creating local jobs.

The project bolsters Texas’s role in the Biden Administration’s push to expand domestic semiconductor production amid the global shortage which is plaguing the automobile, smartphone and myriad other industries. In addition to Samsung’s existing fab, the state’s capital Austin hosts chip plants owned by Dutch firm NXP Semiconductors and Germany’s Infineon Technologies. 

The other state making strides in chip production is Arizona, which has lured $32bn worth of fab investments over the past 18 months from the world’s two other leading chipmakers Intel and Taiwan Semiconductor Manufacturing Company.