President and CEO of the Texas Economic Development Corporation (TxEDC). TxEDC’s mission is to promote Texas as the premier state to locate or expand the business and to offer insight and key resources to advisers and decision-makers. Follow Robert and TxEDC on Twitter at @GoBiginTexas.
Becoming North America’s semiconductor hub is good for Texas
Texas is poised to become the semiconductor hub of North America, thanks in large part to the leadership of Gov. Greg Abbott and our elected leaders in Washington, D.C.
In July, U.S. Congress passed the CHIPS for America Act to promote the research, development, and fabrication of semiconductors within Texas and the United States.
“Texas is a beacon of innovation and has remained the nation’s leading exporter of semiconductors and other electronic components for 11 years in a row,” Gov. Greg Abbott said in recognition of the importance of this legislation to Texas. “The passage of the CHIPS Act of 2022 will leverage Texas’ investments in the semiconductor industry and encourage more semiconductor-related companies to operate in the Lone Star State.
“In addition to enabling Texas and the United States to create even greater economic potential, this Act will further cement a secure semiconductor supply chain in our country and strengthen national security by decreasing our dependence on foreign production. I want to thank both Sen. Cornyn and Rep. McCaul for their leadership in passing this critical legislation, charting a course for greater opportunities for generations of Texans and Americans,” Abbott said.
Also in July, Business Facilities magazine designated Texas the No. 1 state in the nation for semiconductors, citing Samsung’s new $17 billion chip manufacturing facility in Taylor, Texas, north of Austin.
That plant begins construction in 2023 and is expected to begin production in 2024. Samsung’s $17 billion investment could just be the beginning as the company has decided to potentially increase their already historic investment in Texas to include 11 new semiconductor manufacturing facilities in Taylor and Austin.
But that’s not all.
New semiconductor projects
Abbott was in Sherman, a small metropolitan area city in North Texas, on May 18 to mark the official groundbreaking by Texas Instruments (TI) of a new potential $30 billion semiconductor fabrication plant. Construction of the plant, which will manufacture 300 mm wafers for use in consumer electronics and other products, will begin in 2025 and will be built over four phases. It is expected to employ more than 3,000 people and will contribute billions of dollars to the Grayson County economy.
As Abbott noted on May 18, the Texas Instruments plant will play a significant global role in alleviating a worldwide chip shortage, but it also signals the beginning of new private investment in the semiconductor industry in Texas.
“TI’s historic, long-term investment in Sherman will expand Texas’s global economic influence and benefit Americans across the country by strengthening our domestic semiconductor supply chain,” Abbott said. “This new plant will be a boon to the hardworking people of North Texas, and I thank TI for their continued investment in the Lone Star State as we develop our growing advanced technology industry and keep our state a national leader in semiconductor manufacturing.”
The semiconductor manufacturing industry has been thriving in nations like Taiwan, China and Japan for the past 30 years. But Abbott, Texas Congressional leaders, and the state’s economic development community have been working to elevate Texas as a hub of semiconductor manufacturing activity to rival chip production in other countries.
This is important, not just in preventing future chip shortages and to U.S. national security, but also to the long-term economic health of Texas.
National Semiconductor Centers Texas Task Force
The national security aspect is something that Sen. John Cornyn, R-Texas, stressed in his comments welcoming the Samsung plant to Taylor in December 2021. Cornyn and other Texas Congressional leaders helped push through the CHIPS act, which will provide incentives for companies to build semiconductor chip manufacturing facilities in the United States.
“It’s shoring up a vulnerability that COVID-19 exposed,” Cornyn said. “An overreliance on other nations off our shores to produce the key components of our most vital defense assets is a huge, huge risk. It’s an unacceptable risk.”
Bringing new semiconductor industry investment to the Lone Star State will also have a variety of positive impacts on Texas and Texans.
These include advancing STEM education in our schools, providing higher paying wages for employees at Texas chip manufacturing plants, and increasing to the tax base of Texas counties. It also contributes to Texas’s status as the top exporting state in the nation and our position as the ninth largest economy in the world through diversification of the state’s economy and adding to its nearly $2 trillion in GDP.
Gov. Abbott has also led the effort to bring federally funded semiconductor research and development to Texas — through the creation in October 2021 of the National Semiconductor Centers Texas Task Force, led by Adriana Cruz, executive director of the Governor’s Office of Economic Development and Tourism. I am honored to also serve on this task force.
Our goal is to convince the U.S. Department of Commerce to select Texas as the site of the National Semiconductor Technology Center (NSTC) and the National Advanced Packaging Manufacturing Program (NAPMP). The task force brings together stakeholders from private, economic development, higher education and local government sectors to create the proposal, which advocates that Texas is the best place in the nation to create a hub for advanced semiconductor research.
Because Texas has been able to attract significant private investment in chip manufacturing, both foreign and domestic, and because of Texas’s impressive research capacity at our Tier 1 universities, we believe the Lone Star State is the best place to locate these national research centers.
TI’s potential $30 billion commitment to build an advanced semiconductor facility in the Sherman area and Samsung’s $17 billion and potentially growing facility in Taylor are just two examples why Texas is perfectly positioned to become not only America’s advanced manufacturing hub but also the incubator for semiconductor innovation, research and development. This is good not only for the future of Texas, but also for the future — and security — of the United States in a rapidly changing world.