Abbott Advocates Semiconductor Production

A gloved hand holds a semiconductor. | Image by Gorodenkoff/Shutterstock.

Texas Gov. Greg Abbott and GOP members in the Texas Legislature are advocating for additional resources to develop the state’s semiconductor industry.

During a recent press conference, Gov. Abbott said, “Texas is the birthplace of the integrated circuit, and we have since risen as the number one state in America for semiconductor manufacturing.”

“In order to achieve our promise for the remainder of this century, we need to pass the Texas CHIPS Act,” Abbott claimed. “This is a national competition to design and build the future of semiconductors, and it is a race that Texas must win for our state, our workforce, our national security, and our future.”

Abbott added, “With this legislation, Texas will not only remain number one in America for semiconductors—we will be number one in the world.”

“I thank Chairman Bonnen and Chairman Huffman for proposing this important legislation so that Texas can have the tools needed to continue our dominance in this critical industry,” Abbott concluded.

In the House, Rep. Greg Bonnen (R-Friendswood) has filed HB 5174, which would establish the “Texas Semiconductor Innovation Consortium” and “Texas Semiconductor Innovation Fund.”

The consortium would be formed of appointees designated by the presidents of 18 public colleges and universities, with the purpose of leveraging “the expertise and capacity of institutions of higher education, industry, and non-profit stakeholders to develop a comprehensive strategic plan to ensure ongoing semiconductor innovation.”

Additionally, the consortium would work to “sustain Texas leadership in advanced semiconductor research, design, and manufacturing,” as well as “attract public and private investment in the state related to research, development, commercialization, and manufacturing of semiconductors.”

An executive committee will manage the consortium with three members appointed by the governor, two by the lieutenant governor, two by the speaker of the house, in addition to the Chancellor of the Texas A&M University System.

The innovation fund will provide appropriations matching for state entities and public universities “for semiconductor manufacturing and design projects” in addition to issuing “grants to private businesses with an established presence within the state of Texas to encourage economic development related to semiconductor manufacturing and design.”

Sen. Joan Huffman (R-Houston) has filed the companion bill in the Senate, which has been sent to the Senate Finance Committee for evaluation.

Since the passage of the federal CHIPS and Science Act in 2021, Abbott has sought to capitalize on the available $50 billion in federal taxpayer dollars to increase Texas’ role in semiconductor production.

In his proposed budget, Abbott explained, “The CHIPS Act presents further opportunities for Texas in Research and Development … and manufacturing, in the form of federal incentives to attract semiconductor manufacturing facilities and their suppliers back to the United States.”

In the same document, he recommended that “the 88th Legislature consider a cross-government approach to ensure Texas is competitive for CHIPS Act related opportunities, as well as ensure state funding is available to fully leverage the federal funding provided.”

Already, Texas has become a hotbed of development activity related to the semiconductor industry, sparking land grabs in areas close to anticipated manufacturing plants, as reported by The Dallas Express.

Some have expressed opposition to programs that would use taxpayer dollars to underwrite and subsidize private semiconductor companies.

For example, Sen. Bernie Sanders (D-VT) opposed the national CHIPS Act, explaining, “When the government adopts an industrial policy that socializes all the risk and privatizes all the profits, that is crony capitalism.”

“The five biggest semi-conductor companies that will likely receive the lion’s share of this taxpayer handout, Intel, Texas Instruments, Micron Technology, Global Foundries and Samsung, made $70 billion in profits last year,” he continued. “Does it sound like these companies really need corporate welfare?”

On the other side of the aisle, Sen. Mike Lee (R-UT) agreed with Sanders, denouncing the legislation as “corporate welfare,” and saying on the Senate floor, “This is wrong. Deep down, we know it is wrong to take from the poor and give to the rich. We have no business doing this.”

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