Fort Worth weighs tax break for $1.4 billion chip plant
Key Facts
Fort Worth’s City Council was scheduled to consider on October 27, 2026, a tax abatement agreement application submitted by AeternZ Semiconductor Testing Corporation, the Texas subsidiary of King Yuan Electronics. The city notice said the council would consider approving the agreement as part of its regular meeting agenda, putting the application under consideration but not establishing that it had been approved. The application is tied to the development of a semiconductor manufacturing facility in a proposed tax reinvestment zone. The proposed zone covers 27.08 acres. The application puts Fort Worth among the options for a U.S. facility whose location King Yuan had not identified when it announced its investment plan in July.
Fort Worth had clarified that its council retains exclusive authority to approve or reject any tax abatement agreement. The city also said economic incentives are negotiated on a case-by-case basis and each agreement is subject to council approval. The application’s inclusion on the meeting agenda therefore does not mean the company has received the abatement or that the project’s location has been settled. The municipal process shows that the final decision rests with the council. The application concerns an abatement tied to improvements added to the property, according to the city’s description of its program.
In July, Reuters reported that King Yuan planned to invest up to $1.4 billion to establish a facility in the United States. The company did not identify in that announcement where it would build the facility, a construction timeline or the customers it would serve. The Fort Worth application presents a potential site for the project, but does not establish that the company has selected it definitively. Reuters also described King Yuan as a supplier to Nvidia, without calling it a major supplier. Implementation and customer details remain undisclosed in the available information about the July plan.
Fort Worth’s move came amid a broader expansion of chip-testing capacity. On October 21, NVIDIA announced it would provide King Yuan with a $1.1 billion capacity-reservation advance to support new testing facilities and equipment in the United States. The company said high-volume production was targeted for April 2027. The announcement sets out financial support and a target timeline for an expansion involving King Yuan, after the company had announced a U.S. investment plan of up to $1.4 billion in July. The July announcement did not specify the facility’s location or construction date, while NVIDIA’s announcement gave a target date for the start of high-volume production.
NVIDIA said it expected to double total semiconductor testing capacity between calendar years 2026 and 2027. It said the expansion would be based on projects in the United States, Taiwan and Singapore, placing U.S. testing facilities within a multi-location plan. In its announcement, the company linked the expansions to increased capacity needs for AI infrastructure and said: "Demand is extraordinary, and capacity is the constraint." The statement reflects NVIDIA’s assessment of demand and production capacity in its announced plan. The April 2027 date refers to the targeted start of high-volume production at the new testing facilities that will be supported by the advance to King Yuan.