By Justin Sayers – Senior Staff Writer, Austin Business Journal
Aug 15, 2025
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Another company in the area is in the process of seeking a foreign trade zone designation for its facilities in an attempt to avoid tariffs.
Dongjin Semichem Texas Inc., a Korean chemical supplier to Samsung Electronics Co. Ltd. that has a site in Killeen, received a letter of no objection from the Killeen Independent School District on Aug. 12 to participate in the program.
It's the third letter of support Dongjin has received from the biggest taxing entities in Bell County, after securing one from the city of Killeen in May and another from the county in June.
Other companies that have sought out the foreign trade zone designation in recent months include SpaceX in Bastrop County, Applied Materials Inc. in Travis and Williamson counties, and Flex Ltd. in Williamson County.
The foreign trade zone program — under supervision of U.S. Customs and Border Protection — is generally considered the U.S. version of "free trade zones." It applies to secure areas in or adjacent to CBP ports of entry where merchandise isn't subject to duty or excise taxes, meaning goods can be exported freely and are exempt from some taxes or tariffs.
The five-county Austin region is served by Foreign Trade Zone 183, which was established in 1991 to capitalize on the growth of the tech industry and to provide local businesses with a tool to help them compete in the global economy, according to Opportunity Austin. The Foreign Trade Zone of Central Texas Inc. serves as the grantee of FTZ 183 and is run by a board of directors appointed by the cities and chambers in the Austin metro.
Tyler Robert, vice president of economic development for the Killeen Chamber of Commerce, said Dongjin's application is expected to be voted on in September as a subsite of FTZ No. 183. It would mark the city's first FTZ.
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He said the company was interested in the program because it imports chemicals for the chip fabrication process through the port in Houston and to Killeen. The company had been in a holding pattern because of the slow ramp up of Samsung's Taylor factory, but it's now looking to bring more materials to the country.
"This process allowed them to effectively hold on to what they had without being hit for the inventory tax as well as deferring the duties they would be paying as they were waiting for Samsung to get their operations up," Robert said. "They're looking to ramp up their hiring by Q1 2026 to be fully operational to supply to Samsung now that the contract is in place."
The FTZ essentially means that the company can avoid paying some inventory taxes. Chamber officials estimated that the company had $5.3 million worth of inventory in 2024 and paid about $35,000 last year to the city. If the FTZ is approved, it won't pay that in the future.
Robert said they have talked to other companies in the past but the program didn't make financial sense at the time. Now, however, he said companies are more interested and the region is aiming to use the program as a catalyst for recruitment to bring more foreign direct investments in industries like semiconductor and artificial intelligence.
"I think with the changing landscapes and a little bit of uncertainty, this provides more certainty in the market," he said.
Ben Ramirez, manager of FTZ 183, has said previously that more companies could look to get foreign trade zone designations as tariff policies solidify.
“Because of the changes in the (Trump) administration and companies seeking to find some type of relief from the imposed tariffs on imported goods, we're seeing a lot more interest in that program throughout the U.S.," Ramirez said during a July 15 meeting of the Williamson County Commissioners Court.