Samsung to WNY? Unlikely.

Site in Genesee County is one of five in the U.S. under consideration for large micro-chip factory. Austin, Texas, appears poised to land the facility, however.

Samsung has economic development officials — and Sen. Chuck Schumer — dreaming big.

The semiconductor giant has plans to build a $17 billion plant that would employ 1,800 and says it is considering five locations in the United States, including an undeveloped industrial park in Genesee County. Schumer has spoken directly with Samsung officials and offered federal assistance to entice Samsung to Western New York. Economic officials in Buffalo and Rochester stand ready to make their case, if they haven’t already.

It seems unlikely that Samsung is coming, however. 

In addition to Western New York, Samsung is weighing two sites each in Texas and Arizona, according to The Wall Street Journal. In a statement to Reuters, Samsung confirmed that it is considering an expansion of its facilities, but no decision has been made. 


Related story: A lot of money spent, with little to show for it.


Austin, Texas, appears to have a leg up, as it is already home to Samsung Austin Semiconductor, one of the largest manufacturing facilities of its kind in the world. The site, which employs 2,500, produces digital components for smart phones, tablets and other devices.

The Dallas Morning News reported last fall the company’s purchase of 250 acres of land next to the existing Austin facility and application for zoning variances on the property. The Austin American-Statesmen reported, based on documents filed with the Texas comptroller’s office, that Samsung is seeking more than $1 billion in public incentives to build the plant there. 

Given the subsidies and Samsung’s existing plant in Austin, the company’s odds of expanding there are “north of 90 percent,” said Nate Jensen, a professor at the University at Texas-Austin who studies subsidy programs. He described efforts to lure Samsung to Western New York as a “Hail Mary.”

Roger Kay, a market analyst with Boston-based Endpoint Technologies Associates, agrees.

He described Austin as having the “inside track” on the Samsung project, suggesting the other sites, including STAMP in Genesee County, are most likely involved to help the company drive up the value of incentives in Austin. 

“They want to be in Austin,” he said. “There’s no reason not to be in Austin, but they probably need some straw men to offer some deals that look better than what they are currently getting out of Texas.”

While authorities in Austin have been transparent about what Samsung is seeking, officials here have remained mum. Officials at the Genesee County Economic Development Center, Invest Buffalo Niagara and the New York Power Authority and the all refused requests for comment on the Samsung project. Empire State Development issued a statement saying it “does not confirm or deny whether any potential negotiations are occurring until such time as they are concluded.”

Samsung isn’t the only iffy project for the STAMP facility in Genesee County. There’s also uncertainty about Plug Power, a “green hydrogen” company mentioned as another possible tenant in the industrial park. On Feb. 3, the Western New York Power Proceeds Allocation Board approved a $1.5 million grant to support Plug Power’s proposal to build a $264 million plant employing 62. However, a spokesman told the Rochester Democrat and Chronicle that STAMP is one of  “a number of sites” under consideration.

Industrial park is undeveloped

The Genesee County site — known as the Science and Technology Advanced Manufacturing Park — covers two square miles and is zoned to accommodate 6 million square feet of commercial space. The site is largely undeveloped, save for a six-tenths-of-a-mile road and a sign. 

The STAMP site is located in the rural Town of Alabama — population 1,869 — 35 miles northeast of Buffalo and 53 miles west of Rochester. It’s bordered by farmland, the Tonawanda Indian Reservation and the 10,828-acre Iroquois Wildlife Refuge. 

Kay, the industry analyst, said STAMP seems to have few, if any advantages. It’s distant from metropolitan areas and universities and at present lacks basic infrastructure — water, sewer and electricity.

I don’t think they (Samsung) seriously want to move into a cornfield where there’s nothing so far,” he said.

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In contrast, Austin is a known quantity to Samsung, said Jensen, the University at Texas professor.

They know the politics here and they know the economics here,” he said. “They want to move quickly.”

Dick Lavine, a fiscal analyst who runs the good government group Every Texan, anticipates Samsung will ultimately decide to expand in Austin. It’s already got the land, has access to a suitable workforce and knows the political lay of the land.

“If I were betting, I’d bet on Austin,” he said. 

AnandTech, a trade journal, reported this Wednesday:

There are four criteria that the new location must meet in a bid to make sense for Samsung’s leading-edge fab, according to the documents filed with the Texas authorities: access to talent, existing semiconductor manufacturing ecosystem, speed to market, and strong public- private partnership (i.e., incentives). Samsung already has a fab in Texas, so it already has talent and a supplier ecosystem in the state. By contrast, it will have to fight both for talent and supplies in Arizona (against Intel and TSMC) and New York (against GlobalFoundries).

Those criteria do not appear to bode well for the Genesee County site.

Proposed subsidies are costly

The manufacturing of semiconductors has largely shifted overseas to China, Taiwan and South Korea. The U.S. produces only 12 percent of the world’s microchip supply. There’s a move afoot to bring at least a portion of that work stateside

Samsung is based in South Korea and has manufacturing operations in five locations in China. The Austin plant is its only facility in the United States.

Congress included incentives in the National Defense Authorization Act passed in January, but the program has not yet been funded. That leaves Samsung pursuing state and local tax breaks and subsidies.


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New York state has previously subsidized two similar operations.

GlobalFoundries, a semiconductor company headquartered in Santa Clara, Calif., received $1.4 billion in state aid for a $15 billion advanced fabrication facility that opened in 2009 and employs about 3,000 in the Town of Malta, north of Albany. 

The state has offered $500 million in grants to help North Carolina chip manufacturer Cree build a $1 billion silicon-carbide chip plant offering 600 jobs in Marcy, a town outside Utica. The facility remains on schedule to begin production in early 2022. 

Greg LeRoy, a national subsidy expert and executive director of Good Jobs First, cautioned that such mega-deals do not provide taxpayers a good return on investment.   

“If this new facility is looking for subsidies in that range, taxpayers, grab your wallet,” he said. 

A $1 billion subsidy for 1,800 jobs works out to about $500,000 per job. The government will never collect enough in taxes to cover those costs, he said.

“Taxpayers can never break even.”

Given all the variables, Kay, the industry analyst, suggested Western New Yorkers temper their expectations for landing Samsung.

“I think you guys are being played,” he said. “My advice to New York in this case is to probably not take this too seriously or spend too much money on it because, you know, it’s probably not going to you.”