< Previous34 TEXAS ECONOMIC DEVELOPMENT GUIDE “ TEXAS IS AMERICA’S UNDISPUTED JOBS LEADER ” —GREG Abbott, Governor of Texas NO Personal or Corporate Income Tax TAX TEXAS LED THE NATION IN HIGH TECH EXPORTS FOR THE 12TH YEAR IN A ROW IN 2024 TEXAS PRODUCES 9% OF ALL U.S. MANUFACTURED GOODS 9 % 50 MANUFACTURED GOODS OF 3.3 MILLION SMALL BUSINESS CALL TEXAS HOME COMPANY HQS TEXAS IS HOME TO AND HUNDREDS OF PUBLICLY TRADED FIRM MORE THAN All data courtesy of the Texas Economic Development & Tourism OfficeTEXAS ECONOMIC DEVELOPMENT GUIDE 35 MADE IN TEXAS: A POWERFUL GLOBAL BRAND A LEADING STATE FOR CYBERSECURITY, AEROSPACE, FINANCIAL SERVICES, MANUFACTURING, STARTUPS, HIGH TECH, TOURISM, AND OTHER INDUSTRIES TOP STATE FOR OIL AND GAS PRODUCTION, FOR WIND- POWERED GENERATION AND NOW FOR UTILITY-SCALE SOLAR TOP STATE FOR FARMS, CATTLE, CORN, AND MORE FOR AEROSPACE MANUFACTURING ATTRACTIVENESS NO. 1 All data courtesy of the Texas Economic Development & Tourism OfficeL ots of states aspire to have an advanced manufacturing industry the size of the one growing in Texas. At more than 240,000 workers, many countries do as well. Four clusters comprise the industry: aerospace vehicles, aircraft and defense; automotive; computers, electronics and semiconductors; and production technology and heavy machinery. Combined, these sectors employ 7% of U.S. advanced manufacturing workers, contribute 9% of the country’s industry-related GDP and account for 8% of national advanced manufacturing exports. Two sectors employ more than half of Texas’ advanced manufacturing workers — aerospace with 51,000 and computers, electronics and semiconductors at 85,000, more than 47,000 of which are semiconductor-related jobs. The latter number will be higher once recently announced semiconductor projects are fully staffed. Texas Instruments is investing about $30 billion in building up to four wafer fabrication plants in Sherman that will employ 3,000. Construction of the first two is under way. In Taylor, Samsung is investing $17 billion in a new fab facility that will employ 1,800. Infineon Technologies, AMD and Tower Semiconductor are among Texas’ other sector players. by MARK AREND Microchips and Spaceships Power Texas’ Manufacturing Prowess 36 TEXAS ECONOMIC DEVELOPMENT GUIDE ADVANCED MANUFACTURING The first semiconductor computer chip was invented at Texas Instruments in Texas. Photo courtesy of Texas Instruments38 TEXAS ECONOMIC DEVELOPMENT GUIDE Texas has a decades-long history of semiconductor manufacturing, and it plans to keep it that way. In October 2021, Governor Greg Abbott formed the National Semiconductor Centers Texas Task Force to bring together semiconductor industry stakeholders from the private sector, community partners and higher education institutions to further Texas’ leadership in the industry. “With Texas at the helm of this initiative, our growing tech community, world-class research institutions and emphasis on innovation through collaboration will surely keep the nation on the cutting edge of advancements in this sector,” the governor stressed. “Texas offers the foundation necessary to fully address the country’s commercial and defense needs in the semiconductor arena.” Where the CHIPS Fall In June 2023, the governor signed the Texas CHIPS Act into law to encourage expansion of existing companies and to marshal the state’s higher education assets to help attract new semiconductor investment. Specifically, the Act created the Texas Semiconductor Innovation Consortium (TSIC) and the Texas Semiconductor Innovation Fund (TSIF) and established the Texas CHIPS Office under the Governor’s Texas Economic Development & Tourism Office (EDT), which administers TSIC and the TSIF. TSIC is an advisory body composed of representatives from 19 higher education institutions that reports to the governor and legislature on its efforts to maintain Texas’ leadership status in semiconductor research, design and manufacturing and to grow opportunities for workforce training in the field among other functions. According to EDT: “The TSIC will leverage the expertise and capacity of institutions of higher education, industry The semiconductor computer chip was invented in Texas. Photo: Getty Images40 TEXAS ECONOMIC DEVELOPMENT GUIDE and non-profit stakeholders to develop a comprehensive strategic plan to ensure ongoing semiconductor innovation; sustain Texas’ leadership in semiconductor research, design and manufacturing; attract public and private investment in Texas related to semiconductors; identify and expand opportunities for workforce training and development related to semiconductors; and establish a forum for public and private stakeholders across the semiconductor manufacturing industry with Texas to focus on education, research and commercial production.” The Texas CHIPS Act launched the TSIF in June 2023 with a $698 million appropriation from the Texas Legislature, which also appropriated $666 million for advanced R&D centers at The University of Texas at Austin and Texas A&M University. TSIF awards grants to companies and higher education institutions that foster economic development related to semiconductor manufacturing and design. In November 2024, the first TSIF grant was awarded to Intelligent Epitaxy Technology, Inc. (IntelliEPI), the only U.S. manufacturer of epitaxy-based compound wafers used in telecommunications, photonics, radio frequency and microwave technologies. The $4.1 million grant is being applied to the company’s new 30,000-sq.-ft. wafer production facility in Allen, making total capital investment in the project $41 million. The grant will help IntelliEPI modernize its epitaxy reactors in Texas, the state where the company first incorporated the technology. “This TSIF award underscores the critical importance of our advanced compound wafer technologies, along with TSIF’s strategic goals for semiconductor innovation,” said Dr. Yung-Chung Kao, IntelliEPI’s CEO and chairman, on accepting the grant. “The funding will not only Photo: Getty Images M ore than 730 automotive manufacturing facilities are located in Texas, with additional companies moving or expanding to Texas at a rapid pace. Due to auto industry growth, the state has experienced a 48% increase in automotive manufacturing output since 2015. Texas also ranks No. 2 in the U.S. for automotive exports, including motor vehicles, bodies, parts and trailers. Many factors power the growth of this industry in Texas, including a large and highly skilled workforce, a central geographic location in North America, state- of-the-art infrastructure networks, exceptional quality of life for workers and a friendly business climate for companies of all sizes to thrive. Texas’ innovative workforce development programs help cultivate the automotive workforce of the future. Here are just a few of Texas’ advantages: • “Made in Texas” is a powerful global brand. • A highly skilled, diverse and growing advanced manufacturing workforce. • Expanding supplier ecosystem. • Location and logistic advantages, by land, air and sea. • Texas is a right-to-work state. • Faster permitting and room to grow. • Companies do not incur tariffs when manufacturing and sourcing products from Texas. Many companies on Fortune’s Global 500 list have headquarters or major operations in the state, such as Toyota, General Motors, Toshiba, Caterpillar and Tesla. The General Motors automobile factory in Arlington has been in operation for more than 70 years. In addition, Peterbilt and DeLorean Motor Corp. have long-established operations in the state. Other global brands have made major auto investments in Texas. The Tesla Gigafactory in the Austin area helped solidify Texas as an auto manufacturing mecca. Toyota’s manufacturing facility in San Antonio has produced trucks and SUVs for nearly two decades. Other fi rms that have announced big investments in Texas include East Penn Manufacturing Co., Navistar, Continental Automotive, Vehicle Accessory Group and Saleen Performance Parts. Driven by increasing demand, the list of suppliers building in Texas is growing, and includes Aisin Texas, which opened its manufacturing plant in Cibolo in 2021 to produce automatic transmissions for Toyota’s trucks and hybrids, Japan-based CKD Corporation, which established its fi rst U.S. production site in Austin, and many others. TEXAS ACCELERATES U.S. AUTO MANUFACTURINGSpaceX Super Heavy “Booster 10” and Starship “Ship 28” in the Orbital Launch Complex. Photo courtesy of Getty Images expand our production facilities but also solidify the State of Texas’ position as a key hub for compound wafer manufacturing, a critical need for America’s national and economic security.” The most recent TSIF grant, for $7.87 million, was awarded in March to DSM Semichem to support expansion of the company’s specialty materials and chemicals facility in Plainview. The grant brings total investment in the project to $176 million; 40 new jobs will result. The company produces electronic-level sulfuric acid to clean wafers and not leave residual impurities or unidentifiable particles, a critical step in manufacturing chips in high-performance computing. The company plans to make central Texas its semiconductor material production hub. Out of This World Aerospace vehicles, aircraft and defense — another pillar of Texas’ advanced manufacturing industry — is hardly a newcomer to the state. For 60 years NASA’s Johnson Space Center in Houston has been the nerve center of the nation’s manned space missions from the Gemini and Apollo programs of yesteryear to the International Space Station in orbit today. Boca Chica, near Brownsville, is home to SpaceX Starbase and the headquarters for Elon Musk’s SpaceX space technology company and its Falcon 9 orbital class reusable rocket, Starlink satellite Internet service and other programs. It’s also one of two SpaceX launch sites in Texas, the other being in McGregor, southwest of Waco. Van Horn, in rural southwest 42 TEXAS ECONOMIC DEVELOPMENT GUIDETEXAS ECONOMIC DEVELOPMENT GUIDE 43 Texas, is the launch site for the New Glenn and New Shepard reusable rockets developed by Jeff Bezos’ aerospace company Blue Origin. These ventures are hardly the last word in Texas’ space technology playbook. In March 2004, Gov. Abbott announced the leaders of the new Texas Space Commission and Texas Aerospace Research and Space Economy Consortium (TARSEC), both of which aim to keep the Lone Star State at the forefront of space exploration and innovation. The Texas Space Commission (TSC) will work to strengthen Texas’ proven leadership in civil, commercial and military aerospace activity by promoting innovation in the fields of space exploration and commercial aerospace opportunities, including the integration of space, aeronautics and aviation industries into the Texas economy, says the Office of the Governor. The Commission is governed by a nine-member board of directors, who will also administer the legislatively created Space Exploration and Aeronautics Research Fund (SEARF) to provide grants to eligible entities. “With the Texas Space Commission, our great state will have a group that is responsible for dreaming and achieving the next generation of human exploration in space,” said Gov. Abbott. “Texas is the launchpad for Mars, innovating the technology that will colonize humanity’s first new planet. As we look into the future of space, one thing is clear: those who reach for the stars do so from the great state of Texas.” The 88th Texas Legislature appropriated $150 million for businesses or nonprofits involved in the space exploration, research or aeronautics industry and governmental entities with which TSC has entered into an intergovernmental agreement. In Janaury 2025, TSC awarded four SEARF grants, the largest being $19.7 million for The Borderplex Alliance in El Paso, a regional, nonprofit economic development. Next >