U.S. forfeited microchip production, but Texas could help get it back

The United States leads the world in semiconductor research, design and innovation. However, our abdication of electronics manufacturing preeminence over the past three decades is an example of the hollowing out of a critical strategic industry.

For this reason, we have high hopes for a $1.4 billion, five-year partnership between the Defense Advanced Research Projects Agency and the University of Texas at Austin to establish the first U.S. hub for advanced microelectronics manufacturing. If successful, the partnership could accelerate the resurgence of a domestic semiconductor manufacturing industry.

The irony is that the nation and Texas have been here before, as recently as the 1980s when the federal government, the state and major American semiconductor companies set a goal of keeping the United States the world’s most dominant player in advanced technologies.

But since then, the U.S. semiconductor industry has been on the wrong side of semiconductor manufacturing, having shortsightedly traded its domestic manufacturing capacity for short-term offshore manufacturing cost advantages.

The United States, which gave birth to the microelectronics revolution and once controlled 100% of the semiconductor industry, has seen its market share plummet to roughly 10%, the result of decades of outsourcing, first to Japan and then to the rest of Asia.

Taiwan is now a global leader in the semiconductor industry, producing about two-thirds of the world’s semiconductors and over 90% of the most advanced chips found in smartphones, computers, cars and countless other products. Such concentration of vital electronics offshore, even in the hands of a close ally, poses national security and commercial vulnerabilities. China’s threats against Taiwan and Russia’s invasion of Ukraine, which threatens access to other critical materials used in semiconductor manufacturing, further adds to global risks.

DARPA, which develops advanced technologies for the military, has a long history as a trailblazer tracing back to the 1960s, when the organization paved the way for the modern internet. This time, DARPA is tasked with creating a next-generation domestic center and program to pioneer cutting-edge fabrication techniques.

This collaboration smartly builds from the passage of the CHIPS and Science Act of 2022, which provided billions of dollars to bolster microelectronics research, development and manufacturing in the United States. Through DARPA, the Defense Department will invest $840 million and the state of Texas will invest $522 million into the University of Texas at Austin’s Texas Institute for Electronics, which will house the center.

Texas already is reaping benefits from private and public investments. Samsung and Texas Instruments are investing billions of dollars in new semiconductor plants in Texas. Separately, Texas A&M Semiconductor Institute has a project to increase research and education and train semiconductor workers to support state and federal semiconductor initiatives. And across the country, the Biden administration has taken steps to help foreign manufacturers produce chips in the United States.

America invented the microchip, and Texas could help revive the industry on our shores.

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