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Samsung (SMSN) rises 6% with $17bn chip plant set for Texas

By William Hoffman

14:47, 23 November 2021

Samsung chips in a pair of hands
Samsung set to produce chips in Texas - Photo: Samsung

Samsung is reportedly set to choose Taylor, Texas, for the site of its new $17bn (£12.7bn) chip plant in a win for US President Joe Biden’s efforts to increase US production of semiconductors.

Texas Governor Greg Abbott is set to announce the site of the new plant during a speech Tuesday, according to The Wall Street Journal. Samsung, however, told media it has yet to decide on a location for the plant, and it is also said to be considering sites in Arizona and New York.

The stock of the South Korean tech company shot 5.7% higher on the Korean Exchange in Monday trading and moved another 0.5% higher Tuesday following the reports.

US investment

The semiconductor shortage continues to slow manufacturing lines holding up production of cars, gaming consoles and smartphones.

In order to jump-start production, Congress passed the US Innovation and Competition Act over the summer, which approved $52bn of spending for domestic semiconductor manufacturing among other investments in research and development. The bill is meant to make the US more competitive in the global market and less dependent on China’s growing tech production.  

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Texas already passed a comprehensive incentives package that would give Samsung $114m in tax rebates over the first 10 years. Samsung is seeking tax breaks of $1.77bn in total over 20 years.

The tax breaks are contingent on meeting certain construction deadlines and the company’s ability to create 1,800 full-time jobs.

No matter the location, Samsung said it plans to begin construction of the 6-million-square-foot plant in January 2022, with production up and running by the end of 2024.

Read more: Samsung books record sales in September quarter

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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