How a Small Town Has Fared as a Microchip Factory Brings in Billions

Samsung is building a massive, multi-billion dollar microchip fabrication plant in the middle of a cornfield in Taylor, about 40 miles northeast of Austin (photos by Jana Birchum)

Brandt Rydell, the mayor of Taylor, Texas, traces his family's roots in the area back to the 1800s. There are few people who know the history of Taylor so well, or spend so much of their time thinking about its future. These days, however, thinking about Taylor's future is a daunting task.

Rydell started negotiating with Samsung Electronics in January 2021 and has watched as closely as anyone as the corporation reached an agreement to build in Taylor, began construction on its new state-of-the-art manufacturing facility, entered into a partnership with the local high school, and laid plans for future investments that could boost a reported initial investment of $17 billion at the site to as much as $200 billion. It's a head-spinning investment.

"Less than five years ago, the entire valuation of the city of Taylor was less than $1 billion," Rydell said. "It's hard to comprehend just how dramatic the changes will be going forward."

In the community of less than 20,000, that feeling appears widespread. "Samsung is the largest foreign investment in Texas' history," said Amy Everhart, a planning and zoning commissioner in Taylor and co-founder of the Texas Beer Co. "It's a $17 billion project, and could be 10 times more than that because they've said they want to build more fabs [microchip fabrication plants] on the same site ... The scale of this is not something another small town has seen."

When Taylor landed the facility over competing bids from Phoenix and Buffalo in 2021, the deal was hailed not only as a record investment in Texas but as a boon for national security. The facility is expected to produce high-performance chips, substantially increasing the U.S. supply of domestically produced chips and, theoretically, decreasing its reliance on Chinese chip manufacturing. It's a facility that promises to put Taylor on the geopolitical map, while transforming wide swaths of its physical and cultural landscape.

A Small Town’s “Golden Age”?

Rapid development and growth is not a new phenomenon in Central Texas, but this kind of rapid growth – driven largely by one multinational corporation – is a different proposition. By 2040, the population of Taylor is expected to double to 40,000. The school district tax base is expected to increase seventeenfold.

Many in Taylor are excited by those promises. Rydell says that Pflugerville Mayor Victor Gonzales told him that when he was growing up, kids in Pflugerville would go to Taylor, not Austin, to do their back-to-school shopping. By the time Rydell was growing up, however, the only viable thing to do in Taylor was leave – and that's exactly what he did, attending the University of Arkansas and then moving to Austin to go to law school at UT. When he returned to Taylor with his wife to start a family in 2006, he was both comforted and disquieted by how little things had changed.

"There was this comfortable feeling that, 'Hey, it's just about like it was when I left,'" he said. "That's also bad news: In a 17-year period, nothing had really changed in Taylor, and in fact in some cases, it had regressed."

Rydell is optimistic that a new "golden age" is around the corner for Taylor. But the realization of that new golden age may come with a variety of challenges for a town that wants to grow but preserve its neighborly, ordered small-town feel, to expand its tax base but remain affordable, to grow but not sprawl. It's also a bet that Samsung, a corporation worth in excess of $300 billion USD, will provide Taylor with more than it will extract.

Amy Everhart, a planning and zoning commissioner in Taylor and the co-founder of the Texas Beer Co., which brews in Taylor

Rydell, with his law degree and stints as corporate counsel for Walmart and Schlotz­sky's, is not the typical Taylor resident. The median household income in Taylor is just over $60,000, below the national median. In the Taylor Inde­pen­dent School District, which is majority­-Hispanic, 70% of students qualify for free and reduced meals. For all its quaintness and proximity to Austin, Taylor in some ways resembles other diverse, lower-income areas in which major corporations have decided to build large facilities in recent years: Amazon in the Inland Empire region of California; SpaceX in Brownsville, Texas, and the surrounding area; and Tesla in Del Valle, to name a few.

In those cases, the results of development for the local communities have been decidedly mixed. Many of the high-paying jobs at those companies have gone to out-of-towners with levels of education and experience local residents largely lack. The relocation of these corporations has driven up housing prices, while operations have created an array of environmental headaches disproportionately impacting longtime residents.

The Corporate Partners

Samsung isn't run by Jeff Bezos or Elon Musk, and Rydell praised the Korean company as a "good partner" throughout the negotiation process. The company even took home a prize at the Texas Commission on Environ­mental Quality's annual awards banquet last year in Austin for, in the words of Gov. Greg Abbott, "protecting our state's natural resources."

But as Texas Monthly reported then, Samsung's short environmental record in Texas has been less than sterling. As of last year, TCEQ was actively investigating them for wastewater discharge that turned a nearby creek orange. The year before, tanks at a Samsung facility holding wastewater with sulfuric and hydrochloric acid spilled into a pond and, after a major rainstorm, flowed all the way out to the Colorado River. The TCEQ decided in that case that Samsung was not directly at fault for the spillage, but that decision also came as the state was trying to convince the corporation to invest in Taylor.

That campaign worked, fueled by nearly $1 billion in property tax breaks from the city of Taylor, its school district, and Williamson County over the 30-year life of the deal. In return, Samsung has promised to create 2,000 jobs – though it remains to be seen exactly whom those jobs will ultimately benefit. Samsung has not made any commitment about how many of those jobs will go to residents of Taylor or people in the surrounding area, where fewer than half of city residents have a high school diploma and fewer than 5% have a graduate degree. Rydell said he expects an influx of managers and workers from South Korea, where Samsung is headquartered, to arrive in Taylor in the coming years, and he's planning to travel at some point to the city of Pyeongtaek where Samsung has another manufacturing center.

Samsung, for its part, says it's committed to being a good corporate citizen. Michele Glaze, a Samsung spokesperson, wrote in an email to the Chronicle that the corporation provided a gift of $1 million last year, split between Boys & Girls Club of East Williamson County, Bluebonnet Trails, Shep­herd's Heart, and Taylor ISD, and also gave the city of Taylor $300,000 to support "civic and community engagement" in the city. Glaze also wrote that the corporation is "committed to environmental stewardship" and "has sought to build a more diverse and inclusive workforce pipeline."

Getting Ahead of the Curve

There are, of course, plenty of people in Taylor who simply want the town to remain the same – to avoid the kind of rapid growth that has upended the rhythms of life for so many in Central Texas in recent years. But to a number of people both inside and outside Taylor, the choice isn't between growing with Samsung and keeping the town static. Taylor had already reportedly approved the construction of 3,000 new homes in 2021, before Samsung broke ground. "In Taylor, no growth was never on the table," said Jake Wegmann, a professor in the school of architecture at UT whose research focuses on community planning and housing affordability. "It was only a matter of time before it got folded into the orbit of the growing Austin metro area."

Wegmann said the town should act now to buy up vacant plots of land and prepare to try to control as much as possible the shape of its growth. "It's kind of up to them to get ahead of the curve and be proactive about it, because I think if they just hang back, a wave of change is going to wash over the town – with some good effects and bad effects," he said. "There's definitely kind of a time element to this: There are things they can do now, or soon, that they won't be able to do if they wait."

Officials in Taylor are well aware that they're facing development pressure. In November 2021, shortly after the Samsung deal was announced, the city adopted a new comprehensive plan to formally outline the way it intends to grow over the next several decades. "Envision Taylor" commits the city to maintaining "Taylor's uniqueness and small town atmosphere" and aims for housing that "accommodates all ages, abilities, household types, and income levels."

To do that, Rydell said, the city wants to focus on diversifying its housing stock and prioritizing infill housing and additional dwelling units over single-family units on detached lots. The city is looking at liberalizing its zoning laws to help make that happen. The goal is added density, not sprawl.

Taylor High School is directly across the rural field where the Samsung factory is materializing

"We're trying our best to implement different strategies that we hope will help," Rydell said. "We want to ensure that we have a diversity of housing stock as new development comes online, and have price points up and down the spectrum – and really have a big focus on that 'missing middle' of the duplexes, fourplexes, college court, small apartment complexes."

There is a sense in town that Taylor has to act decisively not only because of the Samsung development, but also because of what has happened in recent years in other Williamson County towns such as Round Rock, Pflugerville, and Hutto, which have experienced exponential growth. Pfluger­ville's population has more than doubled over the last two decades, as has Round Rock's. As those towns have grown, so has Taylor's appeal as a relative oasis in Central Texas – close enough to Austin to access its many amenities, far enough away to escape its noise and congestion.

Hearing From the Landowners

People who moved to or have decided to stay in Taylor for those reasons are predictably unhappy. One of the most vocal groups organized in opposition to the city's general direction and comprehensive plan is the Taylor Landowner Rights Coalition, a group composed of roughly 50 sets of landowners who own land along FM 973 outside the city limits, close to where the plant is being developed. The coalition warns on its website that "our home is going to change from ranch-style wide-open country to densely developed urban living. It's only a matter of time." Many of those landowners want to take advantage of their proximity to the Samsung plant and sell, but say the city is preventing them from doing so.

"Some people thought, 'Well, at least I'll be able to sell my land and go find some place hopefully comparable, some place else in Texas' – and where insult has been added to injury here is that the city of Taylor has killed tons of deals," said Chris Johns, an Austin attorney representing a number of members of the coalition. Johns estimates that the city has blocked over $100 million worth of real estate deals with clients he represents because it has declined to grant approval to would-be buyers to develop the land for commercial purposes.

"I think a lot of people are just like, 'Are you kidding me? You invite these people to town, OK, I get it, that should have raised the market value of my land – and yet you're telling me I can't sell it for anything other than agricultural or residential uses?'" Johns said. He argues the city is violating Texas law and that his clients, many of whom he described as "land rich and cash poor," are being left behind by the Samsung investment and the city's plan to grow alongside it.

But the people in Taylor who may suffer most, if patterns from other gentrifying cities hold, are renters. Nearly a third of the housing units in Taylor are rented, and a substantial number of those renters are older, in their 60s and 70s.

Devin Padavil, the Taylor ISD superintendent, has worked in school districts across Texas, from Fort Bend to Houston to Frisco to Pflugerville. He came to Taylor two years ago, just as the Samsung negotiations were getting underway, and said the city feels like South Austin did two and three decades ago when he could afford to live there. He's excited about the opportunities the Samsung partnership promises for the school district, including 30 internships that have seen students placed in a range of departments in the company. He's also looking toward possible school district expansion down the line, keenly aware that Taylor will either find ways to prioritize equity or sink into the same patterns of displacement and inequity that have bedeviled towns across the country in recent years. "We cannot control where people choose to live," he said. "However, as we think about attendance zones and future school sites, we just have to be very intentional about asking ourselves the question of how do we help the attendance boundaries of each school be as equitable and demographically and economically balanced as possible."

As Samsung builds and people begin to arrive, people will be watching Taylor – not just because of what Samsung is producing there, but because of the challenge the city is facing in its quest to grow rapidly without losing its soul. "If anyone had figured this out at this point," says Rydell, "we'd all be doing it."

* Editor's note Monday, May 1, 2:07pm: A previous version of this story stated Samsung is worth $400 trillion; the company’s valuation is 400 trillion in Korean won, equal to roughly $330 billion. The Chronicle regrets the error.