Why Semiconductor Companies Are Investing in Texas

Texas’ semiconductor expansion is accelerating across multiple regions of the state. Samsung is investing across Taylor and Austin, Texas Instruments has begun production at its first new Sherman fab, and SpaceX announced a more than $16.8 billion semiconductor fabrication project in Grimes County.

Semiconductor manufacturers like these are choosing Texas because it combines an established chip ecosystem, major manufacturing sites, technical talent, infrastructure, a competitive tax environment, and semiconductor-specific incentives. Here is a closer look.

Billions in New Fabs Are Reshaping the Texas Chip Map

Texas’ chip industry is booming, exemplified by expansions and investments like these:

• Samsung expects to invest more than $37 billion across Central Texas, including two leading-edge logic fabs and an R&D fab in Taylor, plus an Austin expansion. The company also received up to $4.745 billion in direct CHIPS Act funding.
• Texas Instruments plans up to $40 billion for four fabs in Sherman, where SM1 began production in December 2025, strengthening Texas chip fabs and Sherman-Denison economic development.
• SpaceX’s first-phase Grimes County Terafab investment exceeds $16.8 billion and is expected to create 3,000 jobs.

Why Texas Incentives Matter to Semiconductor Investment

Texas has no state personal income tax and does not impose a traditional corporate income tax, while semiconductor-specific incentives can further strengthen the operating case for qualifying projects.

For example, the Texas CHIPS Act created the Texas Semiconductor Innovation Fund for semiconductor research, design, manufacturing, and expansion. Current appropriations total about $948 million, and Samsung has already received a $250 million TSIF grant tied to Taylor.

Federal CHIPS Act funding can complement state and local tools by helping offset eligible costs tied to fab construction, equipment, research, and workforce development. In Texas, that support sits alongside TSIF grants, local incentive agreements, a large semiconductor supplier base, and established manufacturing clusters in places such as Sherman and Taylor. Together, those layers can reduce upfront project costs, support faster workforce ramp-up, and make it easier for chipmakers to build near customers, suppliers, and existing technical talent within Texas’ broader advanced manufacturing in Texas ecosystem.

The Semiconductor Supply Chain Is Following the Fabs

Large fabs create demand for an entire supplier network. In Sherman, Coherent is investing more than $154 million to expand indium phosphide wafer production. In Taylor, Soulbrain is investing more than $120 million in a new U.S. manufacturing facility for specialty semiconductor materials. Those projects illustrate how large fab investments can attract upstream materials, wafer and equipment suppliers into the same regional ecosystem.

Taiwan is an especially important part of that opportunity. Taiwanese companies are global leaders in semiconductors, electronics, and AI hardware, and Texas has established the State of Texas Taiwan Office in Taipei to strengthen trade ties and attract additional investment. The office operates under The Office of the Governor’s Texas Economic Development & Tourism Office and gives Taiwanese companies a direct connection to Texas’ economic development network. Existing investments such as GlobalWafers’ multibillion-dollar silicon wafer facility in Sherman show how Taiwan investment in Texas is already strengthening the domestic semiconductor supply chain.

Chip production depends on chemicals, wafers, equipment, maintenance, logistics, and specialty manufacturing—all of which the Lone Star State offers in spades. Texas’ central location, proximity to Mexico, available industrial land and multimodal transportation networks support supplier access across North America, while the state’s energy infrastructure supports power-intensive manufacturing.

The Talent Behind Texas’ Semiconductor Surge

More than 51,500 Texans work across the semiconductor industry, from engineers and process technicians to advanced manufacturing operators, maintenance specialists, materials professionals, and R&D talent, per the Office of the Governor.

Universities, community colleges, technical programs, and research institutions help build that pipeline. The Texas A&M Semiconductor Institute is adding significant research and workforce capacity at the RELLIS Campus. The Texas A&M University System is developing a $205.5 million institute with advanced semiconductor equipment, research capabilities and workforce-training infrastructure, with occupancy anticipated in 2028.

For site selectors, that depth can lower workforce risk at multiple stages of a semiconductor project, from recruiting engineers and technicians for a new fab to building long-term training pipelines for equipment maintenance, process operations, R&D, and future capacity expansions.

Texas Is Building More Than Fabs

Texas’ semiconductor advantage is increasingly an ecosystem advantage: fabs, suppliers, workforce, research, infrastructure, and incentives reinforcing one another and positioning Texas for the full chip value chain.

For project-specific site selection or incentive guidance, companies should work with The Office of the Governor’s Texas Economic Development & Tourism Office. Contact TxEDC to connect with appropriate Texas resources.