SAN FRANCISCO—Samsung Semiconductor Inc. signed a deal Thursday (Aug. 16) with California's governor and the Santa Clara County board of supervisors to expand its R&D facility in San Jose, Calif.
Samsung Semi—a subsidiary of South Korean conglomerate Samsung Electronics Co. Ltd.—received significant tax breaks from the state and local governments to expand its San Jose R&D facility, which is currently about 300,000 square feet. According to the memorandum of understanding (MOU) signed Thursday, the city of San Jose, Santa Clara county and Samsung "will identify the appropriate level of investment and number of jobs as consideration for the incentives included in the final agreement."
The tax incentives include $500,000 for capital equipment, a hiring tax credit worth about $37,440, a reduction in traffic impact fee from $12.75 per square foot to $5 per square foot, a reduction in construction taxes from 4.5 percent to 1 percent of valuation and a rebate of up to 50 percent on the 5 percent utility tax paid annually for 10 years, all from the city of San Jose. Samsung will also receive an R&D tax credit from California and a discounted rate from Pacific Gas and Electric, which supplies power in the area, according to the MOU.
"Samsung’s expansion in California is great news and it further strengthens the state's role as a world leader in innovation," said California Governor Jerry Brown, in a statement. "Here's a case where government and business work together—and everyone benefits."
A good concession by the California state for Samsung Korea. These kind of concessions are very good motivation for world wide investments in to USA. I feel that this concession or more be extended to USA based manufacturers also.
Good question. The official statement from the state of California does not say.
The story from the Silicon Valley Business Journal story says Samsung intends to expand the facility within the next two years: