Samsung Electronics: Requests for tax exemption from Austin, USA: 900 billion won in 20 years
-Semiconductor factory and expansion in Austin, USA-
Samsung Electronics:
presented the prerequisites for expanding a $ 17 billion semiconductor factory in Austin, Texas, USA.
By February 28, it was revealed that “we are seeking a tax exemption of $ 85.47 million for up to 20 years.”
Texas Government:
However, Texas only allows tax exemptions to attract large corporations for up to 10 years.
“Whether or not a reduction or exemption is granted is the biggest uncertain factor in investment decisions.”
Submission of tax exemption proposal:
Samsung Electronics submitted it to the city of Austin.
It was stated in the “107-page new investment-related tax reduction and exemption proposal.”
Austin City Answer:
It is said that it has proposed to Samsung Electronics “a tax incentive of $ 650 million in 10 years.”
The current situation is that the difference between the two positions is large.
Samsung Electronics Plan:
Samsung Electronics currently has a foundry in Austin.
We are planning to expand the factory in the adjacent land.
Construction will begin in April-June this year, with the goal of starting operations in October-December 2023.
February 16 Factory shutdown due to cold weather:
The cold weather on February 16 caused a power shortage at the Austin factory.
The Austin plant has been unable to restart for nearly two weeks.
Samsung Electronics dispatched more than 100 engineers to the site to inspect the equipment.
However, the industry believes that it may be difficult to restart within a week or two.
Situations where power supply is insufficient and water cannot be secured:
The power supply is still unstable, and the weather makes it difficult to secure water, which is essential for semiconductor factories.
If the factory closure is extended to one month, the operating loss alone will amount to 400 billion won (37.9 billion yen).
https://jp.newtoday.cc/international/5972.html
Samsung’s U.S. Plant Shutdown Feared to Continue until Mid-April
Electric power supply
was resumed in three days as scheduled, but the restart is reportedly delayed due to water problems.
Korean engineers
flew to the United States last week to minimize the damage, but there is nothing that they can do about the matter.
The Austin plant posted around 3.9 trillion won in sales in 2020.
Assuming that it will generate similar levels of sales in 2021, simple calculations
suggest that it will lose 10 billion won in sales if it stops operations for one day.
According to this calculation,
it is estimated that a sales loss of more than 100 billion won has occurred due to the recent shutdown.
If the shutdown continues until the middle of April,
the sales loss could reach hundreds of billions of won.
Considering that it takes a considerable amount of time to raise the yield (production efficiency) to the normal level,
the sales loss may increase further even if the production line is restarted.
In the meantime, in February,
Samsung Electronicssubmitted a proposal to the state of Texas and the city of Austin to reduce taxes by about US$805.47 million for 20 years for its additional investment in its semiconductor plant in Austin.
Samsung Electronics
said in the proposal that a total of US$17 billion will be invested in the expansion of the plant, including the costs of acquiring land, constructing the plant and mobilizing equipment.
Samsung Electronics
is expected to consider other candidate places such as
Arizona,
New York,
Koreaif Austin City rejects its request for a property tax cut.
Businesskorea
http://www.businesskorea.co.kr/news/articleView.html?idxno=61405