Semiconductors, co-invented by Jack Kilby at Texas Instruments, power the world’s tech-driven economy. These devices enhance the capabilities of nearly everything: farm equipment, medical devices, and mobile phones. They are also indispensable components of national security from satellites to electric grids and supercomputers. As with the energy industry, Texas can credibly claim to be a current, global center for semiconductor research, design, and manufacturing.
Americans are already experiencing what happens when the global semiconductor supply chain slows: auto manufacturing is constrained, cybersecurity capabilities are limited, and costs rise.
What happens when this supply chain is impacted by external challenges? America’s military and economic strength are threatened. Nearly 60% of semiconductor “foundry” manufacturing is in high seismic regions such as Taiwan, Japan, and parts of China. Taiwan alone produces 90 percent of the most advanced semiconductor chips. If Mother Nature or geopolitics threaten semiconductor manufacturing, it’s bad news for our state and country.
America cannot have the world’s strongest national security in a complex, multi-domain environment without maintaining ours and our allies’ dominance in leading-edge semiconductors.
We see strong signs that many key Texas leaders agree with this viewpoint. Senator John Cornyn along with Congressmen Michael McCaul and Lloyd Doggett co-filed the CHIPS for America Act to pour significant resources into leading-edge semiconductor research, design and manufacturing here in the United States. Dallas Congresswoman Eddie Bernice Johnson held a hearing on December 2 on the criticality of this legislation.
In research and design, CHIPS for America will award at least two projects worth up to $10 billion to create a National Semiconductor Technology Center and a National Advanced Packaging Manufacturing Program. In manufacturing, CHIPS for America will invest up to $40 billion into expanding domestic semiconductor production capacity. This will build upon recent momentum: Texas Instruments and Samsung announced within days of each other a combined $47 billion in new investments to create additional semiconductor manufacturing facilities and thousands of new, highly skilled careers in Sherman and Taylor, Texas.
The CHIPS for America Act, which has wide bipartisan and bicameral support is critical for our country, our allies and for Texans.
Once Congress and the White House pass CHIPS for America, the U.S. Department of Commerce is expected to create the terms for states to compete to become the home of the National Technology and Advanced Packaging Centers. Texas, which birthed the original Sematech semiconductor research consortium and maintains deep talent, robust training capability and a favorable tax and regulatory climate, is the best home for these centers.
Texas Governor Greg Abbott created a National Semiconductor Centers Task Force, of which we are both members. The task force brings together business, research and economic development leaders to catalogue and promote Texas’ assets so Texas can attract and win both the Technology and Advanced Packaging Centers.
Additionally, Texas Comptroller Glenn Hegar recently released a thoughtful analysis of the criticality of semiconductors to the Texas economy and to the tens of thousands of Texans employed in this industry.
Texans have been able to attract and maintain many of the world’s leading semiconductor design and manufacturing companies because of our pro-business climate. The Texas Legislature keeps regulations light and taxes low for massive capital investments that create jobs for our communities. Company after company has pointed to these conditions as decisive in their decision to locate and grow here. The Texas Legislature must keep the right economic development incentives in place so that we can continue attracting jobs and massive capital investments.
The price of freedom and self-determination is eternal vigilance. TAB and NSIC are supportive of our leaders taking the actions which will protect our country and strengthen our economy.
Glenn Hamer is the president and CEO of the Texas Association of Business, the state chamber.
Drew Scheberle leads the National Security Innovation Council, a Texas-based not-for-profit working to ensure Texas is the partner of choice for national security innovation.