AUSTIN – As global supply chain disruptions continue to impact major industries, Texas lawmakers are looking for ways to ease the burden, including investments and opportunities for critical industries ashore .
“This is a real opportunity, as you see the supply chain being disrupted, for us to sort of remake America, and as you say, restore near shore,” said Senator Lois Kolkhorst, R-Brenham. “This is a real opportunity for America, and especially for Texas.”
The Interim Senate Business and Commerce Committee met Wednesday to talk with industry leaders about ways the state can improve current barriers. This included addressing slowdowns in semiconductor manufacturing and weak labor in trucking. But one message was clear: real impact takes time.
For example, when it comes to semiconductors, the time from shovelfuls to physical products can take years, said Chris Bryan, director of communications and information services for Comptroller of the Texas.
Even though Gov. Greg Abbott is touting the state’s recent hiring of semiconductor makers, those too will take years before chips are made. Two of the biggest investments — Samsung’s $17 billion chip factory outside Austin and Texas Instruments’ potential $30 billion investment for possibly four fabs — won’t be ready for production before the end of 2024 and 2025, respectively.
The lack of semiconductors is particularly worrisome for industries as they are an essential component of electronic items such as computers, healthcare devices and automotive parts. The current global shortage of chips is driving up the prices of goods.
Bryan said attracting these businesses is an essential first step, and lawmakers can help foster it by reducing regulation. But state lawmakers also need to focus on building a workforce for those jobs.
“Policies that support the training and creation of a pipeline for these critical jobs, and the provision of any appropriate support for this, will help alleviate (the problems),” Bryan said.
This includes other critical supply chain jobs such as truck drivers – currently short of 80,000 drivers – and cybersecurity professionals, as well as investments in infrastructure and digital tools that can help resolve bottlenecks, he added.
Bringing semiconductor companies to Texas won’t be enough, said Edward Anderson, a business professor at the University of Texas at Austin.
Making chips is only part of making a laptop computer or medical equipment. If other components are delayed, the item is blocked.
“It was a problem even before the pandemic; (the) pandemic has only made things worse,” he said.
Anderson added that beyond manufacturing, there are other operations before and after a chip is produced. If Texas really wants to produce onshore, it would involve acquiring assembly and packaging companies — both of which require huge amounts of capital — as well as the chemicals needed to manufacture the chips themselves.
“There are other things – on both sides of this supply chain – that are still primarily located in Asia. Bringing these companies to Texas is probably more important right now than increasing semiconductor manufacturing, because we’re already doing a good job there,” he said.
Committee members will consider recommendations for potential new legislation during the next session.
Anderson said whatever lawmakers decide to fix the issue will take time.
“What I would say is that improving some of our supply chain concerns is not a short term task. There are no short-term solutions,” he said.