How Texas Cashed in On Chips

There’s nothing like $47 billion worth of semiconductor manufacturing plant investments to capture the world’s attention.

In Texas, where little if anything is done small, setting records has become the norm, and that’s exactly what happened when Samsung and Texas Instruments announced, within one week in November, that they would build new advanced wafer fabs in Texas.

The Visitors Entrance to the main Texas Instruments campus in Richardson, Texas.

Courtesy of TI

Dallas-based Texas Instruments jumped into the fray first when the 30,000-employee company with a market cap of $167 billion announced last Nov. 17 that it would invest $30 billion to build a new 300-millimeter semiconductor wafer fabrication plant in Sherman. The project is expected to create 3,000 new high-wage jobs and could be completed as soon as 2025.

“In 2021, Texas was ranked No. 1 in the country for its leadership in semiconductors, and we continue to see significant capital investment in areas across the state.”

– Gov. Greg Abbott

Less than a week later, South Korean giant Samsung announced it would invest $17 billion to construct a new chip plant in Taylor near the state capital of Austin. The 5-million-sq.-ft. complex will be the largest plant Samsung has ever built in the U.S. and could be operational by late 2024, according to the Seoul-based firm. Worldwide, Samsung employs more than 287,000 people and boasts a market cap of $384 billion.

Together, these two projects accounted for the largest capital investment week in Lone Star State history and represent the largest semiconductor project announcements ever in the state. More importantly, they help fill a void that occurred in the supply chain when most chip-producing firms decided to offshore their factories to China and other places in Asia.

A recent photo of hundreds of brand-new Ford Broncos collecting snow in the back lot of a Michigan factory went viral when it was reported that every single one of those vehicles was awaiting semiconductor chips before delivery to dealerships around the country.

Shipment of everything from new cars and computers to appliances and airplanes has been disrupted by the global chip shortage; and expanding the capacity of semiconductor manufacturing in America has become an issue of both economic and national security.

A Bold Play on a Big Stage

That’s one reason why Gov. Greg Abbott last October announced the formation of the National Semiconductor Centers Texas Task Force. Abbott said he is launching the task force with the intention of making Texas the future destination of the National Semiconductor Technology Center (NSTC) and the National Advanced Packaging Manufacturing Program (NAPMP). The governor said the task force will convene semiconductor sector leaders from the private sector with higher education institutions and other community partners.

Texas Gov. Greg Abbott & Samsung executives announce the new Samsung semiconductor manufacturing plant in Taylor, Texas.

Courtesy of Texas Governor’s Office & Samsung

“Texas is the ideal location for both the NSTC and NAPMP due to our industry leadership and continued innovation in the semiconductor sector, which is poised to remain strong well into the future,” Abbott said. “This initiative is critical for reinforcing the domestic semiconductor supply chain and is essential to our national security. In 2021, Texas was ranked No. 1 in the country for its leadership in semiconductors, and we continue to see significant capital investment in areas across the state. In addition, the Lone Star State has prioritized developing our large and highly skilled workforce in this sector, ranking No. 2 nationally for employment in semiconductor and machinery manufacturing, employing over 29,000 Texans.”

Texas is also the leading state for exporting semiconductors and other electronic components. Texas had led the nation in this category in each of the past 10 years. Since 2015, Texas has experienced a 35% increase in the number of semiconductor manufacturing establishments across the state. Today, the state has more than 200 of them.

A Cyberstate that Flexes

According to the CompTIA annual Cyberstates report, Texas ranks second only to California with 1.06 million technology workers. Last year, Texas posted the largest numerical increase in tech employment, adding 11,862 such jobs. California was second with an increase of 8,680. Texas is also projected to be one of the fastest-growing states for tech employment over the next eight years. CompTIA estimates that tech employment in Texas will grow by 17% from 2020 to 2030, ranking No. 6 in growth rate in the U.S.

Within AllianceTexas lies Circle T Ranch.
On March 11, Hillwood announced The Campuses at Circle T, a complex of 6 corporate campuses. The campuses are united by 230 acres of parkland and 10 miles of trails. The Westlake development near Fort Worth is intended to be an anchor for more large corporate tenants, who would join firms like Fidelity, Deloitte and Charles Schwab in the Ross Perot Jr. mixed-use community.

Rendering courtesy of Hillwood

In other key CompTIA Cyberstates rankings, Texas ranks third in innovation, second in number of tech business establishments (with 44,727), and second in employer job postings for tech openings (with 363,642).

Texas also claims two of the five fastest-growing tech employment markets in the country, as Dallas ranks third and Austin ranks fifth, according to CompTIA.

Texas ranks No. 2 nationally for employment in semiconductor & machinery manufacturing, employing over 29,000 Texans.

Source: Office of Gov. Greg Abbott

Here are some other key data points from the Cyberstates report:

• Texas ranks second in economic impact from technology jobs, with an estimated $152.7 billion in estimated direct impact from the tech sector.
• The largest category of tech workers in Texas are IT services and custom software services, accounting for over 281,000 jobs statewide.
• The estimated median tech wage in Texas is $85,813 and is 96% higher than the median state wage.