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Texas Lawmakers Want to Give the U.S. Semiconductor Industry a Boost

March 27, 2023
The Texas CHIPS Act would encourage semiconductor-related companies to expand in Texas while also boosting investment in advanced semiconductor research, design and manufacturing.

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Lawmakers in Texas want to give their state’s semiconductor industry a boost and are using two new bills to get the ball rolling. With House Bill 5174 and Senate Bill 228, both of which contain the same language, the lawmakers have laid out their intentions to help expand the state’s semiconductor industry research and development.

Both bills are part of the Texas CHIPS Act (Creating Helpful Incentives to Produce Semiconductors), which would encourage semiconductor-related companies to expand in the state while investing in advanced semiconductor research, design and manufacturing, according to the Midland Reporter.

“The bill calls for a consortium to oversee future innovation,” the publication reports. “Also, an innovation fund would be created to provide funding to colleges and universities that create projects related to semiconductor manufacturing and design while grants would be available to businesses to develop operations in the field.”

Key Bill Points

According to the bill text, the lawmakers say that the Texas Semiconductor Innovation Consortium is composed of designees from 18 different Texas educational institutions. The Consortium will be tasked with:

  • Leveraging the expertise and capacity of institutions of higher education, industry and non-profit stakeholders to develop a comprehensive strategic plan to ensure ongoing semiconductor innovation.
  • Sustaining Texas leadership in advanced semiconductor research, design and manufacturing.
  • Attracting public and private investment in the state related to research, development, commercialization and manufacturing of semiconductors.
  • Identifying and expanding opportunities for workforce training and development related to the research, design and manufacturing of semiconductors.
  • Establishing a forum for public and private stakeholders across the semiconductor manufacturing industry within the state to focus on education, research and development and commercial production.

Garnering Support

The Texas CHIPS Act would also establish the Texas Semiconductor Innovation Fund to provide funding for higher education institutions seeking semiconductor manufacturing and design projects and issue grants to businesses to encourage economic development related to semiconductor manufacturing and design.

Texas Gov. Greg Abbott announced his support for the proposals at a recent news conference, where he talked about the state’s role as the “birthplace of the integrated circuit” and its ranking as the top state for chip manufacturing. He says these are two of the key reasons for passing the Texas CHIPS Act.

“This is a national competition to design and build the future of semiconductors, and it is a race that Texas must win for our state, our workforce, our national security and our future,” Gov. Abbott said. “With this legislation, Texas will not only remain number one in America for semiconductors—we will be number one in the world.”

A Long-Term Plan

In 2021, Gov. Abbott formed the National Semiconductor Centers Texas Task Force to bring together state government, industry leaders, higher education institutions and workforce stakeholders to create a strategic plan to keep Texas a national leader in the semiconductor industry.

Also, Texas’ proposed 2024-2025 state budget directs the Texas Legislature to consider a cross-government approach that would ensure that the state remains competitive for the $53 billion in U.S. CHIPS and Science Act funding opportunities. 

The proposed Texas legislation comes after the passage of the federal CHIPS and Science Act, which was signed into law in August. Federal lawmakers allocated $52.7 billion for semiconductor research, development, manufacturing and workforce development across the United States.

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About the Author

Bridget McCrea | Contributing Writer | Supply Chain Connect

Bridget McCrea is a freelance writer who covers business and technology for various publications.