Interesting video, good PR for Samsung:
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I watched that video this morning. WSJ subscribers tend to be more sophisticated than the level that video is aimed at. It reminded me of a TV commercial. The video doesn't mention far higher labor and construction costs in the US and EU than in Taiwan and China. Onerous environmental approvals and regulations. NIMBY environmentalists trying to sway politicians. If Israel can figure it out, and get Intel to put a fab in Jerusalem (talk about a problematic location), the US should be able to figure out how to support chip manufacturing. Congress also needs to understand (what we know) that fabs need a supporting ecosystem to really make the US viable as a supplier. I can't picture most of the prominent congresspeople understanding that. Perhaps I'm being too pessimistic, but I doubt it.
If you look on a map, Taylor is so close to Austin that I'm sure the locals consider it to be part of the Austin metropolitan area. So, IMO, it really is in Austin, actually just outside of Round Rock.Why did Samsung not expand in Austin, on a property nearby, and instead went to Taylor? Did the New York site ever have a chance? To me it's similar to Amazon HQ2, which was once in NYC and then later only in Virginia. While tax breaks and incentives grab the spotlight the real reason is business climate, and any extras, tax breaks or incentives, are a cherry on top.
CNBC America's Top States for Business ranks states business environments. The most recent 2021 ranking puts Virginia as #1. Texas is #4.
What goes into a high score? According to Wikipedia, there are 10 categories, cost of doing business, workforce, quality of life, infrastructure, economy, education, technology, business friendliness, access to capital, and cost of living.
You can observe that Amazon essentially validated CNBC ranking and its relevance in the real world by selecting Virgina, which offered smaller incentives. Virginia and Arlington offered roughly $800 million in public incentives, compared to $1.8B in NY, $8.5B in Maryland and $7B in New Jersey.
Taylor won, but the reasons Austin and New York lost haven't been discussed. So I'll offer some theories.
New York lost out because it is an inferior place to locate a business, and even big incentives can't overcome that headwind.
Why did Austin lose? The ranking doesn't give county-level granularity but you can note that Austin real estate assessments jumped 54% in 2022. This would give Taylor an edge just not having that kind of cost of living issue. Finally, we don't know what incentives Austin offered, but it may simply have been less.
Is $954M excessive? Perhaps. You can note that in 2018 the HQ2 winning package was $800M, this is in the ballpark of that, plus a little for inflation.