A drive to boost the US semiconductor industry means jobs for Texas

The first commercial semiconductor – the tiny chip that acts as the brain behind just about every computer or electronic gadget you use – was developed by American engineers.

When companies figured out how to manufacture and sell semiconductors, the U.S. dominated the chip industry for decades. And a company called Texas Instruments led the way, soon joined by other chipmakers who gravitated to Texas.

More recently, though, the U.S. lost its lead in chipmaking, and both industry and governments say they’re determined to change that by investing in the development of new fabrication facilities. And those new plants, and the infrastructure needed to support them, are expected to bring many new jobs with them.

In 1990, 37% of semiconductors were manufactured in the U.S.; it’s down to 12% today. And that’s not only meant losses in sales to international competitors, but fewer jobs for U.S. technicians, designers and engineers. Though the U.S. still leads the world in semiconductor design, the domestic chip manufacturing industry isn’t what it once was.

That became apparent during the COVID pandemic, when supply chain disruptions around the world included shortages of computer chips. Manufacturers in the U.S. couldn’t get the parts they needed to build cars, computers and smartphones. And their supply of those chips was dependent on other countries, all of them far across the ocean, and at least one – China – a potential adversary.

Now, after many years ranked behind South Korea, Taiwan and China when it comes to making semiconductors, there’s a concerted effort to bring chipmaking back to the U.S. And a lot of it is happening in Texas.

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Texas benefiting from federal funding

Elected officials from both political parties have gotten behind boosting the domestic semiconductor industry, even as partisanship has made reaching agreements difficult at all levels of government.

Gov. Greg Abbott and U.S. Sen. Ted Cruz agree with the Biden administration that funding more domestic manufacturing will bring jobs and stability for the U.S. And they’ve all gotten behind offering incentives and grants to domestic and even foreign chipmakers to build or expand semiconductor operations here in the U.S.

U.S. Commerce Secretary Gina Raimondo came to Taylor to announce a $6 billion grant to Samsung, which already produces chips in Austin and will build massive new facilities in the Central Texas town.

“We’re rebuilding an entire semiconductor ecosystem in the United States of America,” she said. “And one of our biggest, best, most innovative clusters will be led right here in Central Texas.”

The South Korean semiconductor giant plans to build at least two semiconductor fabrication plants, a packaging facility and a design center in Taylor, for a total investment of $45 billion. And the project could grow bigger, the company says.

The government funding comes from the CHIPS and Science Act, a federal initiative that’s providing $52 billion in grants across the country. Other top recipients include Intel and Taiwanese chipmaker TSMC. Both are building plants in Arizona, the state with the most new chipmaking projects planned; Texas is second.

Not all of the facilities on the drawing board will receive CHIPS funding. Besides Samsung, there are five Texas projects planned, including a $30 billion Texas Instruments facility in Sherman.

Training to be ready for increased demand

But besides incentives to build new plants, semiconductor makers say they need workers who can make and design chips.

“With this move to onshore or reshore semiconductor manufacturing to the United States, there’s an estimated 115,000 new semiconductor jobs [that] are going to come to the U.S., and a large fraction of those are going to come to the state of Texas,” said Roger Bonnecaze, dean of the Cockrell School of Engineering at the University of Texas at Austin.

Last month, UT announced a new master’s degree program in semiconductor engineering. Students will be able to choose from four tracks, depending on whether they’re interested in circuit design, packaging or other in-demand specialties.

“There’s an estimate right now that there’s gonna be a demand for about 31,000 additional master’s degree folks in the semiconductor manufacturing space,” Bonnecaze said. “And there’s a risk that 40% of that demand will be unfilled for lack of qualified candidates.”

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UT’s Texas Institute of Electronics is also partnering with Austin Community College to train technicians who do the work of putting together chips. Support comes from the State of Texas, which has its own CHIPS Act, passed last year.

“There’s a sizable investment in this, and it’s all been thanks to the State of Texas,” Bonnecaze said. “We’re investing around $550 million. And this came from, a little bit from the Board of Regents, and a significant amount from the last legislative session.”

A significant portion of that money will go to build clean rooms and other semiconductor research and development facilities on UT-owned property in Austin, Bonnecaze says. They’ll be available to students, faculty and industry partners.

Existing opportunities

So that’s the big picture: lots of investment coming from companies who want to make chips here, and government support to do it. But for someone who’s already working toward a career in semiconductors, opportunities already exist.

Evelyn Jones, an electrical engineering junior at Texas A&M – and my niece – says they get a lot of grants from big-name electrical engineering companies.

Evelyn Jones

“The specialty I want to go into is circuit design, or circuits in general,” she said. “And A&M’s circuit program is – the curriculum is – very intensive, and it gives you a great background to go into industry.”

Jones says that at A&M, students like her are already in high demand. Last semester’s engineering career fair, where she snagged an internship for the summer, is a case in point.

“It’s normally, in like, several ballrooms at the football stadium,” she said. “But because there were so many people who attended last year, and there were so many companies who wanted to attend, they’re moving it to an entire events center, so that way, people don’t have to stand out in the hot sun for an hour and a half.”

And Jones said that according to a spreadsheet produced by Texas A&M, entry-level electrical engineers can look forward to an average starting salary of $78,000 a year with their A&M degree in hand.

In communities where semiconductor manufacturing is expected to take off, salaries for technicians working in fabs and packaging plants might not equal those of design engineers, Bonnecaze said – but they, and the people needed to support the chip industry in related fields, will be a big part of the growth that state leaders expect.

“Once you have some semiconductor manufacturing companies here, then all the other companies that support their industry are already also located here,” he said.

Given the expected demand for semiconductor workers across the country, and very attractive salaries on offer, I asked Jones how likely it is that she’ll stay near her home when she graduates A&M in 2025.

“I will say, I’d like to stay in Texas,” she said. “I can’t part with H-E-B – just, like, in terms of living conditions, I love H-E-B too much.”

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