Texas aims to lead the future of semiconductor manufacturing

Just before the 2023 Memorial Day weekend, the Texas Senate passed and sent the Texas CHIPS Act bill to the governor’s desk. The legislation creates the Texas Semiconductor Innovation Consortium in a bid to protect the state’s competitive standing for future federal funding and authorizes the Texas Semiconductor Innovation Fund. The recently passed Texas budget appropriates $1.3 million for the Consortium, but it does not appear that there is a dedicated appropriation in the budget bill for the Fund.

There are 19 institutions of higher education in the consortium that was formalized in the legislation, including SSTI members Texas State University and the University of Texas Austin. These higher education institutions, industry, and nonprofit stakeholders will develop a comprehensive strategic plan to ensure ongoing semiconductor innovation.

The Texas CHIPS Act also authorized the Texas Semiconductor Innovation Fund as the state pursues semiconductor manufacturing and design projects. Funding for the Texas Semiconductor Innovation Fund to would come from the state's General Revenue to be used to provide:

• matching funding to state entities, including institutions of higher education, for semiconductor manufacturing and design projects;
• award grants to business entities with an established presence in this state to encourage economic development related to semiconductor manufacturing and design; and
• funding for staff to support or provide services.

The hope is that the legislation will promote more public and private investment related to the research, development, commercialization, and manufacturing of semiconductors in Texas.

Before Congress passed the federal CHIPS and Science Act, Texas Governor Greg Abbott formed the National Semiconductor Centers Texas Task Force. At that time, in 2021, he aimed to bring together statewide stakeholders to create a strategic plan to keep Texas a national leader in the semiconductor industry.

Gov. Abbott noted in a press release in March 2023 that the proposed Texas CHIPS Act would “leverage Texas’ investments in the semiconductor industry, encourage semiconductor-related companies to expand in the state, leverage the expertise and capacity at Texas higher education institutions, and maintain Texas’ position as the nation’s leader in semiconductor manufacturing.”

In his 2024-2025 proposed state budget, Governor Abbott directs the Texas Legislature to consider a cross-government approach that would ensure Texas remains competitive for the $53 billion in U.S. CHIPS and Science Act funding opportunities and make available state funding to boost federal funds provided through the program. 

There is already a precedent for attracting foreign investors. As noted in Business Facilities, Samsung Electronics, Co., Ltd., recently selected Texas for its $17 billion semiconductor manufacturing facility.

Additional goals stated within the legislation are to “sustain [Texas’] leadership in advanced semiconductor research, design, and manufacturing; identify and expand opportunities for workforce training and development related to the research, design, and manufacturing of semiconductors; and establish a forum for public and private stakeholders across the semiconductor manufacturing industry in [Texas] to focus on education, research and development, and commercial production.”