AUSTIN – As the semiconductor manufacturing business grows in Central Texas, how will its ecosystem transform to meet the demands? That's one of the issues that was discussed at a recent Austin Regional Manufacturers Association (ARMA) meeting focused on the semiconductor industry in Central Texas.
ARMA hosted the discussion because the industrial sector of manufacturing, specifically semiconductor, is getting a long-overdue moment in the spotlight. The factory development, operations and workforce for the semiconductor sector is getting recognized for its contributions and the potential of what could happen here regarding the semiconductor ecosystem.
Jon Taylor, Samsung Austin Semiconductor's Corporate Vice President of Fab Engineering and Public Affairs, spoke on the panel, along with NXP's Farah Tuten, Infineon's Steve James and the City of Austin's Economic Development Department's Veronica Briseño. Taylor kicked off the panel by thanking ARMA for their leadership in efforts to build out the workforce for advancing manufacturing.
Central Texas has roughly a $19 billion manufacturing industry, with nearly one fourth of that related to semiconductors. The latest statistics show about 65,000 manufacturing jobs in the region, with the need to add approximately 20,000 more "over the next three to four years" to keep up with the anticipated demand. Workforce development is the main issue for manufacturers—combine that with the current supply chain issues and the panel had a lot to discuss.
"People, parts and materials are our top priorities for the near future that we know are fundamental to our success," Taylor said.
Samsung's decision to build in Taylor will provide greater manufacturing capacity and we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain.
"When you have a project that big, it's going to affect all of Central Texas. You're going to see housing in Hutto, see people from College Station," Taylor continued. "What we found, mostly, is the community is behind helping us with this project. We love the people in Taylor and the city officials have been excellent as well as Williamson County. It's a great win for the city."
As with everything else in the past two years, supply chain issues along with the rising cost of materials have been a hot topic for Samsung as well as its contractors and vendors.
While Samsung has been in Austin since 1996, NXP has called Austin home since 1974 (when they were originally Motorola).
"Workforce is also one of our biggest challenges as we came here [to Austin] because there's good education here—with the University of Texas at Austin—infrastructure and cost of living was better than Silicon Valley," explained Tuten. "All of that has been changing over the past few years. That's where Austin needs to be competing again, so we can continue to hire the best talent."
For the City of Austin, Briseño says the semiconductor industry is part of the area's diverse economy. Looking at four incentive packages with semiconductor companies in Austin, these manufacturing plants generate $4.1 million in sales tax, $14.6 million in residential property tax and approximately $2.5 billion in local payroll.
"What's good for Austin is good for the region, what's good for the region is good for Austin," Briseño said.
While all of the semiconductor manufacturing companies are tackling the same industry-wide issues, there is a mutual amount of respect and comradery within the industry.
"We actually started a fab coalition last year with NXP and Infineon. Although we compete a lot, we're all really united in trying to push forward an agenda for semiconductor manufacturing in the U.S. and Austin. We all have similar goals," Taylor said.
According to Jon Hockenyos with TXP, an economic analysis and public policy consulting firm, in 2021, the semiconductor industry in the Austin-area employed nearly 15,000 people, which represents 22.3 percent of the Austin-area manufacturing employment.
Hockenyos said manufacturing and semiconductors is "crucial to the modern Austin economy." Direct and indirect economic impact from the sector totals $19.1 billion in annual economic impact, $13.2 billion in value-added and $4.5 billion in annual payroll.