Confirmed Land Use Change Near US Austin Plant... Samsung Faces Deepening Dilemma Over '30 Trillion Won Semiconductor Investment'

Final Approval of Restricted Industrial Planning Development Area by City Council Last December
Samsung Electronics: "Only Land Use Changed, No Decision on Investment Scale or Timing"

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Amid reports that Samsung Electronics is considering new construction and expansion of semiconductor factories in the United States, it has been confirmed that the land use change for a site purchased near the current Austin plant was already made in December last year. As the possibility of an investment worth around 30 trillion won in the U.S. and other domestic and international locations is raised to expand foundry lines, respond to surging demand, and counter Taiwan's TSMC, Samsung Electronics is facing deep concerns.

According to the City of Austin and local media Austin Business Journal on the 24th (local time), Samsung Electronics applied to the City of Austin in October last year to change the land use of a site near the Austin plant from 'Planned Unit Development (PUD)', which is used for residential purposes, to 'Limited Industrial Planned Development Area (LI-PDA)'. This applies to 205 acres (approximately 829,606㎡) out of the 258 acres (about 1,044,089㎡) of land purchased since 2018, divided into three major zones. This agenda went through the Austin city team in charge and was discussed at the Austin City Council, receiving final approval on December 10 last year.

The land with the changed use can be used for future factory expansion, which is interpreted as the basic groundwork for expanding investment in the U.S. Michelle Glaze, Samsung Electronics Austin plant PR representative, explained to local foreign media, "(This land use change application) was part of a strategic plan to make business decisions more flexible."

This change is notable because Samsung Electronics has recently been surrounded by rumors of 'U.S. investment.' With the global semiconductor market predicting a 'super cycle' (long-term boom) this year, and considering TSMC's record-breaking investment plan announcement and entry into the U.S., as well as the inauguration of the Joe Biden administration, there are expectations that Samsung will pour large-scale funds into the U.S. Bloomberg reported on the 22nd that Samsung plans to invest $10 billion (about 11 trillion won) to expand the foundry line at the Austin plant, and on the same day, The Wall Street Journal (WSJ) reported that Samsung is reviewing plans to build semiconductor production lines in Texas, Arizona, New York, and other locations with an investment of $17 billion.

However, Samsung Electronics responded cautiously, stating, "The scale and timing of the investment have not been decided." Regarding the Austin plant site with the changed land use, they explained, "It only means the land use was changed, not that expansion will happen soon." Samsung plans to decide on U.S. investment considering Intel's foundry order possibilities, domestic foundry line investments, and the U.S.-China trade dispute.