Texas bolsters Indo-Pacific semiconductor ties with US1.4 billion incentives

Chiang, Jen-Chieh, Taipei; Jerry Chen, DIGITIMES Asia 0

Credit: AFP

Texas Governor Greg Abbott is visiting Taiwan to strengthen bilateral ties in critical industries and attract semiconductor companies to set up plants in his state.

This visit is part of Abbott's larger trip to the Indo-Pacific region, with upcoming stops in South Korea and Japan. As the US government accelerates efforts under the Chips Act to rebuild its domestic semiconductor supply chain, Abbott aims for Texas to play a leading role.

Chips in on the Lone Star State

Texas has allocated about US$1.4 billion from its state budget to subsidize semiconductor factories, including funding for construction and research facilities. Abbott mentioned that the recipients of these subsidies would be announced soon.

Reports by Nikkei, Bloomberg, and CTEE noted that Abbott began his economic and trade mission on July 6, 2024, focusing on the semiconductor and energy industries.

In Taiwan, Abbott met with Minister of Economic Affairs(MOEA) Kuo Jyh-huei, signed an economic cooperation memorandum, and announced the establishment of a Texas office in Taiwan to strengthen economic ties and express support for Taiwan. He highlighted Taiwan's thriving semiconductor industry, particularly noting TSMC as a key player.

Minister Kuo stated that Texas is a critical region for semiconductors, and the MOEA would assist Taiwanese suppliers in exploring opportunities in Texas by integrating relevant supply chains and offering tax and investment incentives.

When asked about the potential relocation of the entire semiconductor supply chain to Texas, Kuo indicated that this would depend on local resources and conditions, and efforts would be made if these requirements were met.

During the trip, Abbott emphasized the importance of not relying on potential adversaries for essential goods, expressing caution towards China and underscoring the need for onshoring semiconductor production in the US.

According to Liberty Times, Abbott also met with President William Lai, who noted that Taiwanese investments in Texas have exceeded US$12 billion. Lai expressed hopes for closer ties between Taiwan's trusted industries—semiconductors, artificial intelligence, military, security and surveillance, and next-generation communications—and Texas's industrial clusters.

Global wafers in Texas

Texas, home to the headquarters of semiconductor company Texas Instruments (TI), is the largest semiconductor manufacturing state in the US, supported by robust logistics infrastructure and relatively lower labor costs.

In 2023, Taiwanese outlet Tech News reported that Global Wafers invested about US$3.5 billion to build a 12-inch silicon wafer plant in Sherman, Texas. The plant, covering 3.2 million square feet, aims for a maximum capacity of 1.2 million 12-inch wafers per month, with the first batch expected to be delivered in the fourth quarter of 2024.

Under substantial US subsidies for the semiconductor industry, Samsung Electronics is constructing a large chip plant in Texas. Abbott noted that many component suppliers are following Samsung to Texas and expressed hope that Japanese companies would establish plants in the state.

Abbott highlighted Texas's lower taxes, vibrant equipment investment, and short approval times for factory construction, which have attracted various industries from California and New York. He also emphasized Texas's economic scale, surpassing Canada and Russia, and its global leadership in liquefied natural gas, hydrogen, and ammonia.