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Texas accelerates semiconductor chip manufacturing

Microchips have become a matter of national security, and Texas is trying to avoid being caught in a crisis.

There is a race to ramp up domestic production of semiconductors for cars, phones and appliances, but skilled workers are needed to make that happen.

The state’s billion-dollar investment illustrates Texas’ commitment to the national race to capture billions of dollars in federal funds for the semiconductor chip industry.

One North Texas economist says having the right mix of incentives and a skilled workforce will be key to the state’s success.

At a news conference on the campus of UT Dallas on Tuesday, Gov. Greg Abbott talked about the $1.4 billion investment Texas is making in the much-in-demand semiconductor industry.

“It will leverage money to promote microchip production,” he said.

The Texas CHIPS Act, passed by the state legislature this past session, seeks to attract new investments, secure lucrative federal grants and create thousands of high-paying jobs over the next decade.

“Success cannot be achieved without exceptional people from PHDs to technicians to everything in every day,” said Dr. David Daniel, chair of the Texas Semiconductor Innovation Consortium.

UT Dallas is part of that plan. The university already opened a new research center to advance semiconductor technology and test electronics in this highly specialized field.

Reliance on chip imports is risky, as was evident during the pandemic. Disruptions in global supply chains led to microchip shortages, which in turn caused shockwaves across the U.S. economy.

Texas Instruments is set to open the first phase of a new semiconductor wafer fabrication plant in Sherman in 2025. But other planned facilities in the U.S. aren’t moving forward as quickly as planned.

Taiwan-based chipmaker TSMC is delaying the opening of a second plant in Arizona, citing a lack of incentives and access to a skilled workforce as contributing factors.

SMU economist Mike Davis says there’s no easy solution.

“If we thought we could depend on that supply chain from overseas for certain things, that’s probably what we would want to do,” he said. “The other thing it’s important to remember is that what we’re calling an investment in domestic manufacturing today is incredibly expensive. So whether this is a good investment or not depends on what you think, the geopolitical circumstances are going to look like in the next 15 years.”

The next steps will be for the newly-formed Texas Semiconductor Innovation Consortium to hire an executive director who will help develop and execute a plan on how to spend the CHIPS Act funds. Fox 4 News

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