Leaders in the semiconductor industry and their Texas allies were alarmed by supply chain disruptions to the sector during the pandemic. Now the state is seeking to turn the lessons learned in the past three years into an opportunity.
Texas is pumping $1.4 billion into microchip research and manufacturing initiatives in an effort to attract new investments, secure lucrative federal grants and create thousands of high-paying jobs over the next decade.
On Thursday, Gov. Greg Abbott approved the Texas CHIPS Act, which will create the Texas Semiconductor Innovation Fund, a pot of money that will subsidize companies that manufacture chips in Texas and provide matching funds to universities and other state entities that invest in chip design or manufacturing projects.
Lawmakers this year appropriated $698.3 million for the new fund and an additional $666.4 million for the creation of advanced research and development centers at the University of Texas at Austin and Texas A&M University.
The investment illustrates the state’s commitment to the national race to capture billions of dollars in federal funds for the industry.
Last August, President Joe Biden signed the federal CHIPS and Science Act, allocating $52 billion to spur semiconductor manufacturing in the country. The law seeks to encourage private investment in the sector by offering subsidies for companies that build new or expand manufacturing facilities and by helping pay for new research and development projects.
States have a role to play in the federal government’s strategy, especially in the training and development of the workforce needed, according to industry experts. And Texas stands out on the national stage because it already has one of the most robust ecosystems in the semiconductor industry.
The federal CHIPS Act could create 100,000 new high-paying jobs in the U.S. by the end of the decade, industry experts estimate. Where investments and jobs take root depends largely on the policies of each state.
Semiconductor companies have already promised $215 billion in investments and the creation of 40,000 jobs across the country in response to the federal CHIPS Act, according to the Semiconductor Industry Association. Sixty billion of these investments will land in Texas, where six projects that will create 8,000 jobs in the sector have already been announced. Texas is the second state with the most planned projects, after Arizona.
Two of the Texas projects will create new semiconductor fabs, as microchip fabrication facilities are known. Samsung Electronics will build one in Taylor, representing a $17.3 billion investment that will create 2,000 jobs; and Texas Instruments will build the other in Sherman, a $30 billion project that will hire 3,000 workers between now and 2035. Another three are expansions of existing semiconductor factories: Texas Instruments in Richardson, NXP in Austin and X-FAB in Lubbock. The last project will build a Global Wafers facility in Sherman dedicated to silicon wafer manufacturing.
UT will get $440 million and A&M $200 million as part of that money. Gotta love a big investment in manufacturing. And I’m sure I speak for everyone in the state when I say “Thank you, President Biden!”