How Texas Became The American Chipmaking Hub

Texas has taken the top spot as the center of U.S. chip manufacturing. The Lone Star State now has more semiconductor fabrication plants than any other state, and six new projects will bring an estimated $61 billion of investment and 8,000 jobs. The integrated circuit was invented in Texas more than 60 years ago, and chip companies are attracted by low taxes, plentiful land, and the $1.4 billion Texas CHIPS Act passed in June. CNBC got a rare look inside three massive chip fabs and toured the two biggest projects under construction: Texas Instruments’ $30 billion site north of Dallas and Samsung’s $17 billion fab near Austin.

Correction: This story has been updated to reflect the correct size ranking of Texas, and details about the invention of the transistor.

Chapters:
00:00 — Introduction
01:58 — Birthplace of the integrated circuit
05:12 — Attracting chip companies
08:36 — Most fabs in the U.S.
12:19 — Water, power and downturn

Produced and Shot by: Katie Tarasov
Edited by: Evan Lee Miller
Supervising Producer: Jeniece Pettitt
Animation: Jason Reginato, Andrea Schmitz
Additional Camera: Katie Brigham, Sydney Boyo, Andrew Evers
Additional Footage: Apple, ASML, Getty Images, KCBD, Intel, NXP, Panda Power Funds, Samsung, Texas Instruments, TSMC

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How Texas Became The American Chipmaking Hub

[willz]

An interesting fact that wasn't mentioned was that Morris Chang, the godfather of the modern-day fab operation, was rebuked from becoming the CEO of Texas Instruments (1985). Instead went back to Taiwan and founded TSMC.

[D.u.d.e.r]

US made a smart move on manufacturing chips back home... its quite logical as its a birthplace of transistor and most of the advanced chip making designs.

[roseliam]

Mr L.J Sevin was one of the founders of TI. I was his nurse in his last days and he was such as amazing, kind, successful and insightful man

[ssotkow]

This CNBC reporter (Katie Tarasov?) has churned out top notch video updates on the semiconductor industry (history, the major players, and suppliers). Keep it up, and well done!

[louie]

great reporting. as a texas native this is great for our economy. texas is quickly becoming a tech power house no longer just an energy power house.

[dirtmoney]

I Worked for SAS and I have to say it’s quite the process to get the wafers built. The logistics and everything that goes into it is very interesting. I would definitely consider going back to work in the manufacturing world.

[keeganbrown]

Kinda disappointing that my hometown of San Antonio hasn't seen the benefits of this Chip making boom. We seriously need to step up our game!!

[php]

One thing those fabs will need is super reliable power grids. A single fab power outage for just a few minutes is measured in tens of millions of dollars. There is a lot of parts inside those fabs that take damage when they lose power. It's all about thermal equilibrium of key working parts and avoiding uneven thermal dimensional changes measured in angstroms.

[kineticstar]

2nd biggest state. I'm a Texan but I'm pretty sure Alaska wouldn't appreciate you not acknowledge that it is bigger. Also, outside of the US TI calculators are not a players in the world market; Casio is the most used math tool.

[portalminer]

Jack Kilby of TI was the co-inventor of the integrated along with Robert Noyce on Intel. Kilby made a very crude device while Noyce made a manufacturable version at nearly the same time. Kilby was awarded the Nobel prize which Noyce would have shared had he still been alive at the time. That's why they are considered co-inventors.

[SlimJims]

I live in Texas but Arizona will always be a second home close to my heart. Glad to see both Texas and Arizona are benefitting from this boom!

[Donkeyearsa]

What the US needs to do is to bring home the production of exotic metals so china cant blackmail the US for the raw materials to make the most advanced chips and other advanced tech.

As for Texas it needs to go all in with molten salt nuclear reactors and to really upgrade its electric distribution infrastructure.

[sayantan]

To support the manufacturing, Texas should build at least 20GW of clean Nuclear Power Plant.

[KyudoKun]

It's crazy that both US and China are at Chip wars, even though they could've just buy more of them in Grocery stores.

[lokesh]

Yes! Local assembly lines sources locally made chips from Texas.

[joetrey]

Perhaps a lesson...
[Quote is from Wikipedia for convenience]

"SEMATECH was conceived in 1986, formed in 1987, and began operating in Austin,  Texas in 1988 as a partnership between the United States government and 14 U.S.-based semiconductor manufacturers to solve common manufacturing problems and regain competitiveness for the U.S. semiconductor industry that had been surpassed by Japanese industry in the mid-1980s.
SEMATECH was funded over five years by public subsidies coming from the U.S. Department of Defense via the Defense Advanced Research Projects Agency (DARPA) for a total of $500 million.

Following a determination by SEMATECH Board of Directors to eliminate matching funds from the U.S. government after 1996,  the organization's focus shifted from the U.S. semiconductor industry to the larger international semiconductor industry, abandoning the initial U.S. government-initiative."

[JRay]

Texas (and SxSW) has always been the leader in semiconductor fab in the US.
You're just waking up to it now.

[mayoz]

It would be CNBC that can't even get the biggest state right.

[ambition]

0:00: 🏭 Texas is becoming a major hub for chip manufacturing, attracting big chip giants and investments.
3:31: 🏭 Texas is becoming a major hub for chip manufacturing, with companies like TI and Samsung expanding their operations in the state.
6:23: 💡 Texas aims to become a major player in chip manufacturing to reduce reliance on Asia and enhance national security.
9:12: 🏭 Texas continues to be a hub for automotive chip manufacturing, with companies like Infineon, NXP Semiconductors, X-Fab, Samsung, and Applied Materials expanding their operations in the state.
12:21: 💧 Taiwan-based GlobalWafers is investing $5 billion to build the country's largest silicon wafer factory in Sherman, Texas, chosen for its access to water resources.
14:58: 💡 Texas chip companies face challenges with power outages, chip shortage, and declining sales, but are investing in renewable energy and expanding production.
Recap by Tammy AI

[VictorDomonik]

Since when is Texas America's biggest state? Does Alaska not exist?