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Taiwan’s GlobalWafers races to break ground in Texas before tax breaks dissolve

Everythings bigger in Texas, including the tax breaks

Taiwanese chip biz GlobalWafers is rounding up a posse of press in time for the Thanksgiving groundbreaking ceremony at the site of its forthcoming $5 billion Texas wafer fab.

GlobalWafers CEO Doris Hsu, speaking during a press conference in Taipei, said she expects to hold the ceremony at the end of November, Reuters reported Tuesday. The timing of the groundbreaking is important as the wafer fab has until December to begin construction or risk missing out on lucrative tax breaks set to expire this year.

Announced in June, the 3.2 million-square-foot facility, located in the city of Sherman near the Texas-Oklahoma border, will produce upwards of 1.2 million 300mm wafers a month when it comes online in 2025. GlobalWafers, one of the largest wafer makers in the world, says the new location will employ roughly 1,500 people when it reaches full capacity.

The Taiwan-based company’s decision to set up shop in Texas only came after regulators in Germany spoiled the company’s $5bn acquisition of rival wafer fab Siltronic. While this would have made Siltronic shareholders considerably richer there were concerns over local supply chains that prompted the German regulators to block the deal.

The project comes as the US prepares to dole out billions in subsidies under the CHIPs and Science Act, signed into law by President Joe Biden last month.

As such, GlobalWafers stands to benefit from approximately $39 billion in subsidies and a 25 percent investment tax credit on new US fabs.

While it remains to be seen how large a piece of the pie GlobalWafers can expect to walk away with, the company is already slated to receive $15 million in grants from the state of Texas.

GlobalWafers’ decision to build in Texas likely came down to tax incentives offered by the state. GlobalWafer in June filed documents [PDF] with the state comptroller’s office seeking a cap on property taxes under Chapter 313 of the Texas tax code.

Chapter 313 incentivizes investments in the state in exchange for capping taxes on property for a period of 10 years.

That particular provision has made Texas something of a hot spot for chipmakers, as they’ve raced to secure lucrative tax breaks before Chapter 313 is sunset in December.

Both Micron and Samsung have filed documents with the Texas state comptroller’s office seeking tax breaks under the program. In the case of Samsung, the company is proposing as many as 11 new fabs in the Austin, Texas area totaling $200 billion.

Meanwhile, rival memory vendor Micron has proposed a large fab south of Austin that would be built in eight stages. According to Bloomberg, the facility could cost as much as $160 billion when complete.

However, beyond Samsung’s $17 billion foundry expansion in Taylor, Texas, neither company has committed to these plans. ®

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