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  • Writer's pictureRic Armstrong

How the CHIPS Act is Impacting Texas Businesses

The CHIPS Act was passed in 2022 and provides $52 billion in funding to the U.S. semiconductor industry. The goal of the CHIPS Act is to boost domestic semiconductor manufacturing and research and development and to help the U.S. compete with China in the global semiconductor market.

The CHIPS Act has the potential to benefit small businesses in a number of ways. For example, the law provides grants and loans to companies that are developing or manufacturing semiconductors. This funding can help small businesses to compete with larger companies, and to bring their products to market more quickly.

In addition, the CHIPS Act encourages partnerships between large and small businesses. This can help small businesses to access the resources and expertise that they need to grow and succeed.

Texas is pumping $1.4 billion into microchip research and manufacturing initiatives in an effort to attract new investments, secure lucrative federal grants, and create thousands of high-paying jobs over the next decade.

In June, Gov. Greg Abbott approved the Texas CHIPS Act, which created the Texas Semiconductor Innovation Fund, a pot of money that will subsidize companies that manufacture chips in Texas and provide matching funds to universities and other state entities that invest in chip design or manufacturing projects.

Lawmakers this year appropriated $698.3 million for the new fund and an additional $666.4 million for the creation of advanced research and development centers at the University of Texas at Austin and Texas A&M University.

Semiconductor companies have already promised $215 billion in investments and the creation of 40,000 jobs across the country in response to the federal CHIPS Act, according to the Semiconductor Industry Association. Sixty billion of these investments will land in Texas, where six projects that will create 8,000 jobs in the sector have already been announced. Texas is the second state with the most planned projects, after Arizona.

Two of the Texas projects will create new semiconductor fabs, as microchip fabrication facilities are known. Samsung Electronics will build one in Taylor, representing a $17.3 billion investment that will create 2,000 jobs; and Texas Instruments will build the other in Sherman, a $30 billion project that will hire 3,000 workers between now and 2035. Another three are expansions of existing semiconductor factories: Texas Instruments in Richardson, NXP in Austin, and X-FAB in Lubbock. The last project will build a Global Wafers facility in Sherman dedicated to silicon wafer manufacturing.

Microchip companies currently have 54 facilities in the state. With about 45,000 workers, Texas has the second-largest workforce in the industry, only behind California, according to the Semiconductor Industry Association. The state is aiming to reach the top position by 2030.

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