There is finally a glimmer of optimism on the global semiconductor chip shortage that has dragged on for the past year. Congress is taking up a bipartisan measure to invest $52 billion on ramping up chip production in the U.S. At the heart of that domestic production lies Texas, where Samsung is planning to build at $17 billion chip factory near Austin.
For a foreign company like Samsung to commit to this type of production in Texas is a major breakthrough, considering nearly 90% of the world's semiconductor chips are currently made overseas. "Chip manufacturing is something that has been primarily occurring in Taiwan, and to a certain extent China, and Japan, and Korea," says Chuck DeVore, Vice President of policy initiatives at the Texas Public Policy Foundation.
DeVore tells KTRH that Texas is uniquely qualified to host chip production, even over Silicon Valley. "Electricity costs are cheaper here, land costs are cheaper, labor is less expensive, housing is less expensive," he says. "So it makes a lot of sense for people to relocate, especially manufacturing, to Texas."
"Seismic events are also not helpful for chip manufacturing," DeVore continues. "That's another advantage Texas has over California...we don't have a lot of earthquakes."
Contrary to popular belief that Texas is primarily an energy and oil producer, DeVore believes the Lone Star State has already become a technology hub in many ways. "For quite some time, Texas has had more high tech exports than California, because it's so much less expensive to manufacture here," he tells KTRH. "I think you're going to see more than just this one factory going up...Texas clearly has the advantage right now."