Wedoany.com Report-Jun 3, The city of Taylor, Texas, announced on April 30, 2025, amendments to its financial incentives for Samsung Electronics' $37 billion semiconductor manufacturing project. The revisions address construction delays and a global oversupply of chips, which have tempered earlier expectations for the facility.

Samsung Electronics' new semiconductor fabrication plant is under construction at Taylor, Texas, on February 14.

Under the new terms, Samsung is required to complete 6 million square feet of building construction by 2026, with an additional 1 million square feet by 2028, totaling 7 million square feet. This requirement aims to ensure timely progress on the project. The original incentive package, which offered up to $25 million in rebates, has been reduced to a maximum of $9 million, contingent on Samsung meeting specific equipment installation targets by the end of 2026.

Taylor has also adjusted its financial strategy to prioritize local budget needs. Starting in May 2025, 90 percent of tax revenue from Linde Gas, a key supplier for Samsung, will be redirected to the city’s general fund instead of supporting the project. This change reflects Taylor’s efforts to reduce costs related to planning reviews and inspections for the semiconductor plant.

Construction of the Taylor facility began in 2022, with an initial target for operations in 2024. The timeline was later revised to 2025 and then delayed again to 2026. Samsung remains committed to the project, with a spokesperson stating: “Samsung remains fully committed to commence operations by 2026.”

The Taylor site is a key part of Samsung’s expansion in North America, featuring two advanced semiconductor fabrication plants for 4-nanometer and 2-nanometer chips, along with a research and development center. The project received $4.7 billion in federal funding through the U.S. Chips Act. However, challenges persist due to a global chip surplus and weaker-than-expected demand, particularly in non-AI sectors.

Industry analyst Song Myung-seob from iM Securities noted: “The plant will probably start operating next year, but an aggressive ramp-up of mass production is unlikely. Scaling up depends on higher utilization rates at existing facilities and stronger order volumes from U.S.-based clients. Neither is guaranteed at this point.”

An unnamed analyst added: “Attracting a stronger customer base will take time, and running these fabs for just one or two clients could significantly hurt profitability.” Despite these hurdles, Samsung continues to navigate market challenges to meet its operational goals in Taylor.