How will the CHIPS Act affect Texas? $35 Billion Tech Investment Potential for Grayson County | News

AUSTIN — Texas economic and manufacturing leaders are praising a new semiconductor bill they say is sure to elevate the state’s role as a leader in chip manufacturing.

Last week, Congress passed the CHIPS and Science Act, a $52.7 billion bill that promotes domestic production of semiconductor chips, which are used in much of today’s technology, including cars, phones, computers and medical equipment.

Robert Allen, president and CEO of the Texas Economic Development Corporation; said Texas would “benefit tremendously” from the CHIPS Act.

“There have been quite a few articles written over the last couple of days about how Texas will likely be the main beneficiary from the CHIPS Act, and I wholeheartedly agree,” Allen said. “This is certainly good news and certainly welcome news for the state of Texas in terms of our ability to continue to shine as the premier state for the semiconductor industry.”

Gov. Greg Abbott and Texas Economic Development and Tourism Executive Director Adriana Cruz have made recruiting semiconductor projects a top priority, touting the state’s ranking as the best state to do business with its tax incentives and growing workforce.

Because of that, they say Texas has set the stage for what will likely be a windfall of major semiconductor investment, followed by related supply chain companies that find it beneficial to be close to customers. The CHIPS Act also included incentives to support domestic supply chains.

Next comes the multiplier effect, which refers to the impact an investment will have on jobs and the economy. According to the Economic Policy Institute, for every 100 direct jobs created in semiconductor manufacturing, 192.2 indirect jobs are created.

So each major Texas announcement not only brings thousands of high-paying tech jobs to the new factories, but tens of thousands of ancillary jobs, including those in the foodservice, retail and hotel sectors. It will also mean more houses and roads will need to be built, furniture and cars will need to be bought and schools will be filled with children, adding further jobs, said Tony Bennett, president of the Texas Association of Industry.

“Just bringing the semiconductor manufacturing sector to your community has an extremely high rate of return for the region,” Bennett said. “It’s not just semiconductor manufacturing that you stand to gain in terms of job creation and economic activity, it’s literally the hundreds of vendors and suppliers that will keep the factory going for decades.”

Coming soon to Sherman

Texas is currently the leading state in semiconductor chip manufacturing with more than $50 billion worth of investment in the pipeline, said Glen Hammer, president and CEO of the Texas Association of Business.

That includes the recent wins of securing Samsung’s $17 billion investment — and possibly $191 billion investment — for several semiconductor manufacturing plants outside of Austin. a potential $30 billion Texas Instruments expansion in Sherman; and a $5 billion chip factory bid by GlobalWafers also in Sherman.

Hammer added that over the next decade or so, Texas could see closer to a quarter of a trillion dollars in semiconductor manufacturing activity.

“As we speak, Texas has the healthiest economy in America, (the bill) just really ensures our long-term prosperity,” he said.

Bennett added that while these plants may take years to stand, in the meantime they are creating thousands of jobs in construction, piping, electrical, steel, concrete and more.

“The impact will be immediate,” Bennett said. “It takes several thousand people to build these factories, so immediately in all your regional occupations … thousands of jobs are created for the next two to three years.

What does this mean for Texas?

Overall, Texas manufacturers and financial experts say the CHIPS Act can only benefit the state and its residents. It will bring more high-paying jobs that will allow communities to flourish as they are able to bring more taxes and resources to their residents.

According to the Texas Workforce Commission, the semiconductor industry added 1,900 jobs from June 2021 to June 2022 at an annual growth rate of 4.5%. In the Dallas-Plano-Irving metropolitan area, the semiconductor manufacturing sector posted an annual growth rate of 3.4% through June 2022, it said.

Bennett added that the jobs themselves provide growth and training opportunities that are beneficial for youth who don’t want to pursue college right out of high school, as well as veterans looking for new career opportunities.

But Texas’ population is already exploding. According to the 2020 Census, Texas added four million more residents in the past decade, and an estimated 1,000 people move to Texas every day. This means a need for more resources such as water, transport and reliable energy.

Hammer said he’s not worried about that, adding that Texas is making the necessary investments to keep up with growth.

“We’re going to rise to the challenge,” Hammer said. “Texas is investing in its infrastructure, we’re going to continue to invest in our infrastructure, but it’s a million times more positive to grow and be a desirable place to do business than to be in the state of California, Illinois and New York which see businesses and people leave. “

He added: “The growth is good.”

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