For small-town Taylor, huge Samsung investment will bring opportunity — and change
Town northeast of Austin becoming 'Silicon Fields' with world-renowned chipmaking hub on horizon
By Justin Sayers – Senior Staff Writer, Austin Business Journal
Apr 17, 2024
In front of an unassuming metal prefab building that houses Davis Grocery and BBQ in Taylor, owner James Davis works to clear weeds next to picnic tables before the lunch rush arrives at what locals call the city's "best-kept secret."
Back when Davis opened the business in 1994, things were perilous. His first building along East Martin Luther King Jr. Drive in Taylor required aluminum paint to prevent rainwater from leaking inside, and it didn't have air conditioning, leaving ice and frozen treats to melt in the Texas heat.
Some surmised he wouldn't make it six months, but he hung on for a decade before moving to the current spot just across the street. Business — like Taylor itself — has ebbed and flowed in the three decades since. While Davis said it's now stable, he has always expected more. A minister who opened the restaurant to supplement his job preaching at a church in Rockdale, he said he received a message from God when picking the locale that it was the right place for him.
His belief has been borne out over the last several months — thanks to a concrete building that's rising above the farmland just six miles away.
Davis said he has needed to purchase a third barbecue pit to service all the new customers who have arrived along with Samsung Electronics Co. Ltd., calling it "one of the best things that ever happened."
"I didn't know about Samsung — that's what I didn't know" when picking the site three decades ago, Davis said. "But I knew the growth potential because everybody else was growing. They don't have anywhere else to go but here. Round Rock, Hutto — they've all outgrown us."
The impact of the Samsung factory in Taylor, about 40 miles northeast of Austin, is well-documented: thousands of jobs, billions of dollars of capital investment and transformation of the small city of 17,000 people that once was the economic engine of Williamson County north of Austin. Taylor is primed to regain that title.
The rewards got even bigger this week, when the federal government committed to provide $6.4 billion in grants to Samsung, widening the company's investment to $45 billion in Central Texas and making it one of the largest economic development projects in U.S. history. The result will be the establishment of one of the most advanced and complete semiconductor facilities in the world, with multiple fabrication lines, a research-and-development facility, a packaging facility and more.
"This project holds incredible importance since we are not just expanding production facilities, we are strengthening the local semiconductor ecosystem and positioning the United States as a global manufacturing destination," said Kye Hyun Kyung, president and CEO of the device solutions division at Samsung Electronics, speaking in Taylor on April 15 when the additional investment was announced.
But lost in the gaudy numbers and political declarations is the actual impact on business owners like Davis. He's one of many in Taylor who already are living the town's new reality, whether it's because of increased traffic as the downtown is revitalized, planned housing projects or rising property values and taxes.
At 72 years old, Davis has had to make changes himself. He arrives at his restaurant earlier to make sure he not only meets the 11 a.m. lunch rush but also fills food orders for contractors working at the Samsung site. He's had to order more wood, brisket and pork — the latter of which is more of a staple in Asian diets.
Change can be hard, he said, but he's among those who view it as good for Taylor. Pointing to now-vacant oil tanks and old mills around him, he said Samsung will provide young people with employment opportunities so that they no longer have to leave the small, historically farming community after high school. He acknowledged some people might be forced out because of high prices but called it a win-win overall.
"If you look at it from the bright side, you're going to win either way you go," Davis said. "If you stay, you're gonna win. If you move, you're gonna win because your property value is going to continue to increase."
For those who stay, especially business owners, "you gotta pay to play," he said.
Williamson County Commissioner Russ Boles said the county's economy was generally solid before Samsung — with Dell Technologies Inc. operating in Round Rock and several companies setting up shop over the last several years — but the semiconductor giant is taking things to a new level.
With area roads and highways filling up, Boles said it's the responsibility of local officials to make sure the infrastructure can support the influx of people. But he said the benefits of the Samsung-related boom are already being felt, with internship programs at local schools and new job opportunities, as well as data center projects in nearby Hutto.
"Without Samsung, we don't get the direct investment in Hutto as well," Boles said.
What is planned for Austin and Taylor as a result of the CHIPS Act funding?
The latest investment will go a long way toward establishing what federal officials are calling a "Central Texas cluster" for Samsung in Taylor and North Austin. In the next five years, it will lead to the creation of 4,500 manufacturing jobs, at least 17,000 construction jobs and tens of thousands of indirect jobs spurred by the supply chain moving to the region, federal officials said.
The additional investment in Taylor will create what federal officials called "a comprehensive advanced manufacturing ecosystem." That includes two fabs to produce 4-nanometer and 2-nanometer chips, an advanced packaging facility to no longer handle that part of the process in Taiwan and a research-and-design lab that will mark the fourth of its kind in the world. Those elements are all expected to be completed by 2027.
In Austin, Samsung's plan includes expanding existing facilities at its longtime campus to support production of the company's fully depleted silicon-on-insulator process technologies. The project, which also includes collaboration with the U.S. Department of Defense, is expected to be completed in 2028 or 2029.
Counting an estimated $18 billion invested in Austin over the decades and the $45 billion now in the works, Samsung's investment tally for Central Texas would be a whopping $63 billion.
In the shadow of a giant
On April 15, more than 200 dignitaries from the Austin area, the Republic of Korea and Washington, D.C., convened in Taylor. They sat in the shadow of a labyrinth of cranes and 2.6 million pounds of concrete being molded by thousands of construction workers into 10 million square feet of improvements, including a 4.3 million-square-foot building that will house the first fab.
Just two years ago, this 1,200-acre site was a cornfield. Speakers during the event, including Kyung, U.S. Secretary of Commerce Gina Raimondo and U.S. Reps. Michael McCaul and Lloyd Doggett, took turns extolling the project and the $6.4 billion in grants to the company through the federal CHIPS and Science Act.
Speakers praised the leadership of President Joe Biden and the bipartisan work of Congress to pass the bill, while also thanking local governments for doing the legwork to help the project rise from the ground. They lauded Samsung for helping to steer semiconductor production back to the United States and away from China amid geopolitical tensions.
The effort is part of a federal goal to produce 20% of semiconductor manufacturing to the United States by the end of the decade, up from 3%.
"This investment will quite literally transform Central Texas," Raimondo said. "It's going to support a comprehensive, diverse, leading edge manufacturing ecosystem here in Central Texas. We're not just out to make these chips for today or tomorrow. We're rebuilding an entire semiconductor ecosystem in the United States of America and one of our biggest, best, most-innovative clusters will be led right here in Central Texas by Samsung."
McCaul, who co-sponsored the CHIPS Act, added that the region will be "the epicenter of the technology revolution the likes we have not seen since the Manhattan Project."
For those from the Austin area, the event was something of a flashback to a similar announcement 30 years ago along Parmer Lane. That's where Samsung has invested $18 billion since 1994 at its North Austin campus and operates two fabrication facilities that total 2.45 million square feet. It marks one of the largest foreign direct investments in the country's history.
In its annual economic report, Samsung reported 5,322 direct jobs and 12,344 indirect jobs in 2023 at the North Austin site, plus roughly 8,900 direct construction jobs and 9,264 indirect jobs last year. The company has more than 600 acres in land holdings at the site — and will expand as part of the CHIPS Act funding.
Doggett said during his speech that he remembers being part of the team that recruited Samsung to Central Texas. He said he learned a few words in Korean at the time, and that the only ones he remembers now are the translations of "teamwork" and "compromise." He credited the facility for having immeasurable impact on the surrounding region.
"Perhaps only the eclipse has brought more people to Austin," Doggett said. "But instead of four cloudy minutes in my part of Austin during the darkness, we're entering now a fourth decade of brighter future because of these investments."
Development around the site — another former greenfield — has validated that view. If you travel down Parmer Lane, you encounter some of the biggest companies in the world, such as Apple Inc. that has built two campuses farther out toward Williamson County, and defense contractor BAE Systems Inc. that has an office near Samsung. In addition, there's ample industrial, retail and housing development. It's a sign of what's to come for Taylor.
McCaul, playing off Austin's nickname of "Silicon Hills" that contrasts it with Silicon Valley, attempted to mint a new moniker for Taylor.
"Now we can say here in Taylor that we have expanded from the Hills to the Silicon Fields," McCaul said.
Crowds in town
Just an hour before the noon announcement, businesses in and around Taylor were bustling. That included Gonzalez Tacos — located across the street from Davis Grocery — where workers were busy blending salsas and slinging tacos for the crowd that gathered outside.
Owner Josefina Flores said she has yet to see an uptick in business because of Samsung — but she said she has seen increased traffic in town and rising rents.
"Before, it all was cornfields (and) now it's houses," Flores said. "Taylor is changing too much."
But Taylor Mayor Brandt Rydell said he recently heard from the owners of another restaurant who said they feared shutting down before Samsung came to town.
"With Samsung's arrival and all the economic activity that has come with that, they are setting records, in terms of sales at the restaurant. What a relief it has been for them to have a lifeline thrown," Rydell said. "That was very heartening to hear."
Davis, of the barbecue joint, was feeling the weight of the rush, too. While he's no longer preaching in Rockdale, he's continuing to preach to the visitors that come to his shop.
"It's been a very rewarding journey — and the journey is not over yet, and the thought is the best is yet to come," he said.
In terms of business, that could be true. Suppliers to Samsung are expected to locate near the chipmaking giant in Taylor, bringing even more jobs, investment and big buildings to town. More housing will no doubt follow, as well as more things to do, whether it's places to eat, shop or hang out.
Ed Latson, CEO of economic development group Opportunity Austin, said "without a doubt" the world is seeing Central Texas as one of the most important semiconductor ecosystems in the United States — and the CHIPS Act announcement highlighted that.
"I expect that to catch the attention of suppliers," Latson said.
Also included in the announcement was $40 million for workforce development to continue training people to work at Samsung. The efforts so far have included internships at Taylor schools and partnerships with local community colleges, but even more workforce development could be clustered in Taylor now.
"That money is definitely needed to create the infrastructure to do the kind of training that's needed to make sure these factories and suppliers are a success," Latson said.
