Gov. Abbott Signs CHIPS Act Keeping Production In Texas

Republican Texas Gov. Greg Abbott on Friday signed the Texas CHIPS Act into law with overwhelming bipartisan support. HB 5174 is designed to keep the Lone Star State number one in the nation in the semiconductor manufacturing industry.

It cleared the House 136-9 and the Senate 28-3.

Abbott noted Texas’ exalted position in the industry at the bill signing and said the new law will “bolster” the state in the U.S. and around the world in semiconductor production.

He tweeted that the Texas CHIPS Act “will ensure Texas remains the home of innovation in semiconductor research and manufacturing.” Abbott thanked lawmakers for propelling the state to the top position.

Part of the state’s plan is to “onshore” production through the Texas Semiconductor Innovation Consortium and the Texas Semiconductor Innovation Fund. Resources from the much-lauded federal program will be enhanced by state efforts to support U.S. industry.

Much of the expected expansion in the industry is centered around Austin, which already has a sizable stake in semiconductor production. The area and much of the country expects an explosion in growth in coming years due to investment at multiple government levels.

This technology is key to everything from automobiles to cellphones. The ramped-up investment comes after an extended global shortage brought on in part by the COVID-19 pandemic and companies overreacting by trimming their output.

Currently, the large majority of global semiconductor production comes from Asia — particularly Taiwan — but that is expected to change.

In a notable exception, both Republicans and Democrats lined up behind the federal CHIPS and Science Act. This measure will pour billions in tax credits and tens of millions of funding into companies to encourage chip making.

Tens of billions will also fund research in innovations in semiconductor and other technologies. Texas wisely hitched its wagon to that movement to support its already burgeoning hi-tech industries.

All of the state but especially central Texas expects to benefit from investment through the federal legislation. And experts note that on the state level, enacting incentives and supporting a pipeline of workers will be key to global leadership.

Officials in Arizona and New York also expect to see a boom in the semiconductor sector.

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