How the Texas CHIPS Act Is Driving Manufacturing
It is imperative for developers to understand these trends and strategically position themselves to harness their potential
The vast sums being poured into new semiconductor plants in Texas presents unique opportunities for commercial real estate development, according to a recent analysis by Colliers.
“It is imperative for developers to understand these trends and strategically position themselves to harness their potential,” the analysis stated. “This entails investing in properties located within thriving manufacturing clusters or strategically positioned amidst the robust logistics infrastructure.”
The new investments are a result of the bipartisan CHIPS and Science Act introduced by the Biden administration and signed into law in August 2022 to revitalize the semiconductor industry in America. The Act set aside $52.7 billion – including $39 billion in manufacturing incentives – for American semiconductor research, development, manufacturing and workforce development. “The CHIPS Act is not merely a legislative initiative; it is a seismic force reshaping the contours of the manufacturing industry,” Colliers said.
In June 2023, Texas signed into law its own version of the Act. The Texas CHIPS Act established the Texas Semiconductor Innovation Consortium (TSIC) and the Texas Semiconductor Innovation Fund (TSIF) and provided a $698 million fund to incentivize private businesses to expand semiconductor manufacturing in Texas. It also allocated $666 million to the University of Texas at Austin and Texas A&M University for chip design and manufacturing projects.
A couple of massive projects are already under construction in the state. Texas Instruments is building a $30 billion plant in Sherman, TX, bringing 3,000 jobs. And Samsung is nearing completion of a $25 billion fab in Taylor, TX, creating an additional 2,000 jobs.
Colliers predicted TI’s Sherman plant will stimulate a surge in office spaces, manufacturing facilities and housing developments. Samsung’s Tayor plant is likely to generate expansion of ancillary businesses and more industrial and residential development to accommodate a growing workforce.
“The CHIPS Act has catalyzed a paradigm shift in supply chain strategies,” Colliers said, leading companies to locate in regions with a strong labor force and diverse supplier base. It said Texas is perfectly positioned to take advantage of the evolving industrial real estate market, positioning the state as a critical player in the future of semiconductor production and the reshaping of CRE development.