This column by TAB CEO Glenn Hamer was published by Forbes. Image by Ayman alakhras / Shutterstock
Texas is the leading exporter of semiconductors in the U.S. and is in the best position to revitalize domestic semiconductor manufacturing, research, and design. But we can’t do it alone, and the CHIPS and Science Act of 2022 acknowledges that.
In March 2023, the U.S. Department of State announced plans to implement the CHIPS Act International Technology Security and Innovation Fund (ITSI), which includes a component to align and partner with friends and allies, assigning $500 million over five years to the fund. The State Department selects suitable projects for ITSI Fund support based on four criteria, with one key criterion being the division of labor with partners.
That is where Jordan, a proven friend and strategic partner, comes in. The nation can play a crucial role in revitalizing the U.S. semiconductor industry by filling talent gaps. The country has demonstrated resilience against regional and global challenges and has a highly-educated workforce to help Texas and the U.S. accelerate the implementation of the CHIPS and Science Act. According to PwC, around 22% of graduates in Jordan are STEM-educated. They have the highest number of engineers per capita globally and excel in advanced engineering manufacturing.
For example, Petra Engineering Industries Co. creates advanced HVAC (heating, ventilation, and air conditioning) solutions and has managed to undertake major projects in the U.S., from NASA to the Empire State Building and airports across the country, benefiting from the advanced engineering skilled resources available in Jordan, as well as the free trade agreement between the U.S. and Jordan. Companies such as Amazon, Cisco, Microsoft, Juniper, PwC, E&Y, Deloitte, Expedia, and many others have leveraged technology to fill their global business needs. In addition to talent, the U.S. can leverage Jordan’s geographic proximity to Europe, where there are almost 50 fabrication sites. Chip packaging in Jordan could also benefit from the availability and the reduced cost of plastic polymers that can be sourced regionally for a 30% lower cost than major plastic exporters in China, as well as significantly reduced shipping costs. The process will require minimal machining compared to the rest of the manufacturing process, which translates to a lower risk of process movement from the manufacturer’s perspective.
Jordan is rich in high-purity silica sand, which can be attractive for end-to-end chip fabrication and manufacturing as a long-term goal. In the shorter term, the first step would be to start with the labor-intensive pre-silicon design and verification, which could benefit from the large pool of skilled engineers in Jordan. These engineers can easily be equipped with the right tools and processes to support U.S. chip industry leaders in accelerating their innovation with a cost-competitive structure, providing highly-capable resources with costs similar to those provided by other Asian countries. The growth in digitally enabled jobs in Jordan between 2019 and 2022 at a 19% YoY is a testament to the cost competitiveness and the ability to scale from Jordan.
Jordan has delivered successful results in various industries, including high-value and technology components. The country has been a close friend to the U.S. for decades, designated as a non-NATO ally since 1996, and has signed a defense cooperation agreement with the U.S in 2021. Jordan has well-documented and optimized laws committing to global IP protection laws, ranking better than many other countries in Asia that semiconductor leaders currently rely on. Additionally, Jordan has mature legislation for foreign investments that includes incentives, tax exemptions, custom exceptions, and more.
The U.S. and Texas can build a stronger supply chain for semiconductors if we develop even deeper relationships with friendly countries like Jordan, where we can achieve both better resilience and cost competitiveness.