Gov. Greg Abbott announced on Wednesday that the state will provide more than $20.8 million in funding to support the expansion of a semiconductor manufacturing facility in Sugar Land.
The grant, issued through the Texas Semiconductor Innovation Fund (TSIF), will go to Applied Optoelectronics Inc. (AOI) to help increase its production capacity. The project is expected to bring more than $279 million in capital investment and create about 500 jobs.
“Texas is leading America’s resurgence in advanced manufacturing,” Abbott said. “This investment by AOI to expand their operations in Sugar Land will create hundreds of high-skilled jobs and advance our state’s leadership in innovation and semiconductor manufacturing. The future of technological advancement will always be built in the great state of Texas.”
AOI, founded in Houston in 1997, designs and manufactures fiber-optic networking products. The company’s expansion is expected to boost production of semiconductor chips and optical transceivers used in high-speed networking systems.
Stefan Murry, the company’s chief financial and strategy officer, said the partnership with the state will support both growth and technological development.
“We are proud to partner with the State of Texas to expand our homegrown manufacturing,” Murry said, per the press release. “This investment helps us to increase our semiconductor and optical transceiver production, create high-quality jobs, and help to define the future of AI data center infrastructure.”
State lawmakers said the funding reflects broader efforts to strengthen Texas’ role in the semiconductor industry. State Sen. Joan Huffman (R-Houston) pointed to legislation she sponsored to encourage growth in the sector.
“I’m proud that the Texas CHIPS Act, which I sponsored, is driving strong momentum for semiconductor growth across our state,” Huffman said. “This grant to Applied Optoelectronics will help solidify Fort Bend County and the greater Houston region as a leading hub for advanced manufacturing. I look forward to more companies taking advantage of the TSIF to bring high-paying jobs and lasting prosperity to our local communities.”
The Texas Semiconductor Innovation Fund was created under the Texas CHIPS Act, signed into law in 2023. The program is designed to support semiconductor research, design, and manufacturing, while encouraging companies to expand operations in Texas and strengthening partnerships with higher education institutions.
State officials said the initiative aims to maintain Texas’ position as a national leader in semiconductor production while attracting continued investment in the industry.
