Samsung’s next phase of expansion…
The proposed facility, expected to span approximately 2.7 million square feet
Samsung Electronics is preparing for the next phase of expansion at its semiconductor manufacturing campus in Taylor, Texas, following a recent agreement approved by the Taylor City Council that will support inspection and permitting for future construction.
The agreement, approved during a late-February council meeting, authorises contracts with HDR Engineering to provide expedited services on behalf of the city for the permitting and inspection processes linked to Samsung’s $17 billion semiconductor research and manufacturing facility.
Although the contracts were approved without discussion as part of the council’s consent agenda, they signal that the city is preparing for the next major stage of development — the planned Fab 2 project. The proposed facility, expected to span approximately 2.7 million square feet, would mark the second major fabrication plant at the Taylor campus and could bring another surge of construction activity to the region.
Samsung’s first semiconductor fabrication facility in Taylor is currently scheduled to begin operations by the end of this year, producing a new generation of chips for Tesla. The agreement between the companies is expected to support chip production for electric vehicles and advanced robotics systems.
While neither Samsung nor city officials have confirmed a definitive timeline for the second phase, the council’s actions suggest preparations are underway for work that could begin as early as late 2026.
Daniel Seguin, spokesperson for the city and executive director of community services, said the city expects additional economic benefits from the next construction phase but is not including projected revenue in its budget forecasts.
Samsung’s original investment in the Taylor site was announced in 2021 by Greg Abbott, governor of Texas. The project was designed to establish a major semiconductor foundry that could eventually create up to 1,800 long-term jobs.
Construction between 2022 and 2024 delivered a significant economic boost to the city. During the most intensive building period for the semiconductor fabs and supporting infrastructure, Taylor recorded $25 million more in sales tax revenue than had been projected without the Samsung project. This increase was partly due to an agreement allowing materials purchased outside the city for the project to pay state sales and use taxes locally.
The additional revenue supported a range of municipal initiatives, including recovery funding following the 2022 winter storm, as well as investments in public works equipment, police and fire services, park improvements, and upgrades to the city’s animal shelter and cemetery infrastructure. A portion of the revenue was also used to offset property tax rates, with the remainder reserved for future contingency needs.
However, as construction activity slowed, sales tax revenues declined. According to the city’s latest independent audit by Brooks, Watson & Co., sales tax income in fiscal 2025 dropped by around 55%, falling to $9.4 million from $20.7 million the previous year. Auditor Mike Brooks noted that the earlier surge was directly linked to Samsung’s construction activity and was not expected to be permanent.
City officials emphasise that budget planning remains based only on recurring revenue streams, with any future windfalls from additional construction phases to be allocated after they are received.
At the height of construction for the Taylor campus — including fabrication buildings, roads, parking areas and infrastructure — around 18,000 workers from multiple trades were involved. The influx of workers also boosted local businesses, particularly restaurants and service providers.
The timing of the second fabrication plant will depend heavily on global semiconductor market conditions. Like other major chipmakers, including TSMC, Samsung has adjusted expansion timelines as it seeks long-term customer commitments for advanced semiconductor production.
One key development has been Samsung’s major supply agreement with Tesla, which Elon Musk has estimated could exceed $16 billion through 2033. The deal is expected to support production at the Taylor facility once it becomes fully operational. Tesla’s Gigafactory Texas in nearby Del Valle further strengthens the strategic importance of the site.
Samsung Austin Semiconductor communications director Michele Glaze said the city council’s decision reflects proactive planning rather than a confirmed construction schedule. She noted that Samsung remains strategically flexible on the timing of Fab 2, with future expansion dependent on market conditions and customer demand.
The Taylor semiconductor campus is expected to employ around 1,500 people by the end of the year, including staff transferring from Samsung’s existing operations in Austin.
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