Austin's semiconductor industry could help address global chip shortage

The global semiconductor shortage has already caused problems for automobile manufacturers, and U.S. Sen. John Cornyn, R-Texas, believes it could soon pose a threat to American jobs, national security and the economy.

Cornyn met with Central Texas semiconductor business representatives at the Samsung Austin Semiconductor facility on Monday to discuss the shortage and his CHIPS for America Act, which would appropriate $52 billion in federal incentives for semiconductor manufacturers. It recently passed the Senate with bipartisan support and is headed to the House, where the same outcome is expected.

"I can't think of any part of our life that hasn't become better, more productive, because of the growth of semiconductors," Cornyn said live at the round table event. "Everything from your cell phone to your car to you-name-it. Everything's sort of like a computer on wheels these days."

U.S. Sen. John Cornyn, R-Texas, met with Central Texas semiconductor manufacturers on Monday to discuss his CHIPS act, which would appropriate more than $50 billion in federal incentives to help address a global chip shortage and better position the U.S. relative to China. (John Cornyn/Facebook)

Local impact

Samsung is considering building a $17 billion chip plant in Austin as soon as this year. The company purchased roughly 258 acres of land in Northeast Austin last October, near its existing chip manufacturing plan, and Austin City Council approved a rezoning request from the company to allow for industrial use on the site in December.

Cornyn said Samsung and other companies won't build such plants without the funding and tax credits accounted for in the bill. "China's building 17 semiconductor facilities as we speak. The United States is seeing one built in Arizona right now by Taiwan Semiconductor," he said. "So we need to think differently about how we encourage manufacturing of this vital component of our daily life here in America."

Without such plants, the U.S. won't be able to compete with China and limit its reliance on imports. "If for some reason our access to the semiconductors made in Asia were cut off … as a result of a conflict or some kind of pandemic or a natural disaster, it would have dramatically bad consequences on the United States," he said, citing virtual learning, telemedicine, car manufacturing and national security as at-risk.

Samsung is considering building a $17 billion chip manufacturing plant near its existing plant in North Austin. (Shutterstock)

Semiconductor manufacturers were among some of the first tech companies to base themselves in Austin. Now companies such as Advanced Micro Devices, Dell, NXP Semiconductors and Samsung are among the metro's largest employers. Representatives from those companies, along with BAE Systems and Infineon, joined Cornyn Monday.

National importance

The U.S. is already feeling the effects of the global shortage, which is the result of myriad factors, including increasing demand as workers and students went remote; supply chain disruptions caused by the pandemic and worsened by the winter storm; and industry consolidation. GM temporarily shut down some of its assembly plants, including one in Michigan, as a result of the shortage, and Apple CEO Tim Cook noted challenges getting ahold of chips during the company's Q2 earnings call, according to the Verge.

The CHIPS act would not only help prevent shortage-induced manufacturing plant closures in the U.S. but also, ideally, bring manufacturing jobs back from overseas. Cornyn attempted to strip the bill of an amendment that would require a prevailing wage for semiconductor manufacturers in the U.S., which he argued would jeopardize Republican support for the bipartisan bill, but the Senate voted 58-42 to keep it.

U.S. Sen. Marco Rubio, R-Florida, was among the supporters. "As we invest tens of billions of dollars into critical industries through large, publicly traded companies, it is only right that we require that those funds also invest in the men and women who build and maintain these cutting-edge facilities," he said in a June 8 statement.