Samsung says its economic impact on area growing notably as an army of construction crews build new factory

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Published on

Mar 1st, 2024

Tally of construction workers yields a head-turning number

South Korean chipmaker Samsung Electronics Co. Ltd. has put out new numbers to show how big of a deal it is to the local economy.

Samsung claims it pumped roughly $26.8 billion into the economy in the past year when accounting for its longtime Austin site and its new factory in Taylor. That’s up from $13.6 billion the year prior, and $6.3 billion the year before that. The company said last year it accounted for roughly 14,900 direct jobs and 23,200 indirect jobs. That’s according to research conducted on behalf of the chipmaker by Austin-based Impact DataSource LLC using information from the company, tax rates and some estimates and assumptions.

To put that amount into perspective, Tesla Inc. reported that the overall impact from its Giga Texas factory in eastern Travis County contributed $987 million to the gross state product in 2022, up from $486 million in 2021 and based on estimates that included its extended supply chain, according to previous Austin Business Journal reporting.

These amounts underscore what impact Samsung has had on Central Texas since it broke ground at its North Austin campus in 1996 — and what impact its Taylor facility should have in the future. Once operational, the Taylor facility could pump $42 billion annually into the Central Texas economy alone, officials have previously said. The factory is expected to open at least partially later this year.

At the North Austin site, researchers said Samsung has invested $18 billion in two fabrication facilities that total 2.45 million square feet of floor space. The company has more than 600 acres in land holdings off Parmer Lane and has hinted that it could build it out more in the future.

At the Taylor campus, about a 20-mile drive northeast of the North Austin plant, Samsung has said the initial investment there is set to be $17 billion, although some estimates have pegged it higher due to rising construction costs. The company reported spending $2 billion on construction in 2022 and $4.8 billion in 2023.

The initial site will include 4.7 million square feet of floor space, a fabrication plant, office space, parking garage, central utility building and special utility supply facilities that will be operational next year. The company owns about 1,200 acres and could eventually build as many as nine additional fabs on the space.

Samsung has secured a number of public subsidies well into the millions at both sites. That includes a combination of school property tax rebates, grants and other abatements from the governor’s office and local leaders. The company has also locked in incentives for future development at both sites.

Other findings in the report:

  • At the Taylor site, the company created roughly 8,900 direct construction jobs and 9,264 indirect jobs last year. That resulted in $11.6 billion pumped into the local economy and roughly $672 million in salaries. The company has said it will create an estimated 1,800 permanent jobs over the first 10 years of operations, with initial average annual salaries of $75,168. The report notes that Samsung will create 2,000 jobs.
  • The Austin site reported 5,322 direct jobs and 12,344 indirect jobs in 2023. That equates to $15.1 billion in economic impact in Central Texas, including $946.9 million in worker’s salaries. In 2023, the facility made annual operating expenditures of $8.2 billion and had salaries of $535.6 million. That equates to an average salary of around $100,647. About 35% of the total direct and indirect employees at the site live in Austin and roughly 52% live in Travis County.
  • The company paid about $126.7 million in water, wastewater and electricity utilities, and about $3.5 million for natural gas at the Austin site. It also paid $1.4 billion in taxes based on land, buildings and other real property improvements and business personal property in 2023.
  • Both sites generated about $245.6 million in taxes for the region for entities like the cities of Taylor and Austin, Travis and Williamson counties, the Taylor and Manor independent school districts and Capital Metro, among others. The majority came from the Austin site.
  • The company said it donated $4 million to 500 nonprofits in Austin, Manor and Taylor.

“The facility isn’t even up and running yet and we have already felt a positive impact at our local nonprofit organizations, additions to our city and school budgets and the personal friendship of many of their staff,” said Tia Rae Stone, president and CEO of the Greater Taylor Chamber of Commerce.

Many of the indirect jobs referenced above are from companies that work with Samsung to provide parts or materials to help in the chipmaking process. While many of those businesses have been in the Austin area for as long as Samsung, some officials have said that hundreds of companies are likely to follow Samsung to the region to support the Taylor facility.

Among the companies in the Samsung supply chain that announced last year they are expanding in Central Texas are Hanyang Eng USA Inc. — a subsidiary of Hanyang ENG Co. Ltd. — which is moving its headquarters to Cedar Park; LS Electric Co. Ltd., which has purchased a big building in Bastrop; KoMiCo Technology Inc., a semiconductor equipment parts company that plans to invest at an existing Round Rock facility; and Schunk Xycarb Technology Inc., which is building a 140,000-square-foot site in Georgetown,

That has not slowed down in the last two months. MGC Pure Chemicals America Inc. is planning to double its capacity in Killeen and MSS International is opening an office in Round Rock. Tokyo Electron Ltd. has secured space for its new North American headquarters in Austin just months after announcing plans to sell its Southeast Austin campus.

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