Austin in Line for Billions in Tech, Transportation, and Clean Energy Funds from Feds

The message to local developers and real estate professionals on Wednesday was clear: Austin is in the mix for tens of billions of dollars in federal money that will continue to transform the area and attract newcomers for decades.

Panelists for the Urban Land Institute Austin discussion on federal funding up for grabs for Central Texas laid out the three main sources: as much as $39 billion in semiconductor stimulus included in the U.S. Chips and Science Act, the federal money likely headed to Austin to help fund $25 billion in planned transportation infrastructure projects, and an assortment of clean energy and health care tax credits resulting from the Inflation Reduction Act.

Most of the panelist talk on Wednesday centered around the Chips Act money, which is attracting competition from projects in upstate New York, Ohio and Arizona. That money is earmarked to help incentivize the construction of new semiconductor fabrication plants, or to revitalize existing facilities.

Austin’s history as a player in the microchip market and the recent multibillion-dollar investment made here by Samsung have local business leaders optimistic that some or all of the Chips Act funding could be headed here.

“We are sitting in one of the single largest opportunities we have ever seen as a region, period. Or our parents for that matter,” said Laura Huffman, former head of the Austin Chamber of Commerce and founder of Civicsol, a startup. “We have federal investment coming through to solve problems that we’ve had for a long time in Austin and to create opportunities. So for me, the Chips Act could not be more important to our economy because we rely on advanced manufacturing. We built our economic reputation, not just nationally but internationally, on this sector.”

The semiconductor economy continues to have a huge influence on the local business ecosystem regardless of what decision federal leaders make, said John Schreck, CEO of Texas Institute for Electronics, who noted that promising progress is being made on a real estate deal involving the former Sematech facility on Montopolis Drive.

And with federal leaders signaling they want as much as 30 percent of the Chips money to be spent on local workforce development, he said the impact for job creation will be significant.

“What that will end up doing is allowing a lot of small to mid-sized companies to compete with large companies and create real opportunities for innovation because they can start mixing and matching these components and create new types of systems. That’s really what we’re focused on,” he said. “In terms of funding opportunity, there’s a part of the Chips Act called NAPMP, which is National Advanced Packaging, where there’s about $5 billion associated with that funding and we are putting together what we believe is a compelling program to spawn growth and innovation through the developments that we plan to do.”

At the state level, lawmakers are at work on legislation that would provide additional stimulus for semiconductor manufacturing, as well as looking toward reforms for higher education funding that could make it easier for potential workers to get needed training for new jobs.

Travis Krogman, vice president of state and federal relations for the Austin Chamber of Commerce, said the early potential for Austin to receive more semiconductor money from Washington, D.C., has spurred increased economic activity for communities around Austin, such as Lockhart, which was in the running for a $100 billion investment from Micron Technology before the company wound up choosing New York as its location.

“Texas did lose out on Micron’s investment and (it) went to New York over Lockhart, so Texas was the runner-up but even before a single dollar of Chips Act funding has left the Department of Commerce, we’ve seen an unprecedented amount of private investment in the United States more broadly,” he said. “It cannot be overstated enough how important it is for Congress to work together to pass big bipartisan bills like the Chips Act because it demonstrates to the private sector that they can say we can invest in this. This is going to happen. But even before the bill was signed into law, we saw big investments across the country, and obviously we want that here in Central Texas.”

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