How states can help the CHIPS Act succeed

In a recent Information Technology & Innovation Foundation (ITIF) webinar, representatives from Arizona, New York, and Texas highlighted the role states play in fostering the growth of the semiconductor industry.

According to the state economic development leaders, longstanding state efforts to attract and expand semiconductor facilities are an important enabler for the federal CHIPS Act, which is designed to bring semiconductor manufacturing back to the United States to enhance economic and national security. State and local incentives for semiconductor R&D and manufacturing are not only required for companies seeking access to federal incentives, but states also have a long history of working with and supporting the industry in other ways, especially for workforce development.

Incentives and Industry Support Initiatives

Arizona is making a $100 million investment to enhance its semiconductor ecosystem, including $30 million to help establish a Materials-to-Fab Center. Arizona’s National Semiconductor Economic Roadmap addresses workforce, infrastructure, supply chain and entrepreneurship to further develop the industry. Arizona has already attracted investment from industry stalwarts.

The New York Governor’s Office of Semiconductor Expansion, Management, and Integration (GO-SEMI) helps support implementation of specific company investments. It is also tasked with developing policies to attract semiconductor and related supply chain businesses and to coordinate workforce development and community investments with local government. New York also created a $10 billion Green CHIPS incentive program.

Texas recently passed the $1.4 billion Texas CHIPS Act, which allocates $700 million for an innovation fund and $660 million to create semiconductor R&D centers at the University of Texas and Texas A&M. The Texas Semiconductor Task Force will help guide collaborations with local and regional partners, universities and industry groups. The semiconductor industry has also announced several investments or expansions in the state.


Expanding the workforce pipeline to match the talent needs that go along with increased domestic manufacturing capacity is a pillar of the federal CHIPS Act. Companies must address workforce development in their applications for federal funds, and state and local partners are expected to participate in these industry-led talent initiatives to build a skilled and diverse workforce with good-paying jobs in the semiconductor industry.

Arizona already has industry-relevant training programs in place, such as the Semiconductor Technician Quick Start Program but will also establish a Drive 48 workforce accelerator program with education and industry partners to focus on semiconductor-related skills development. New York’s GO-SEMI office will address talent development partnerships, while the state’s Office of Strategic Workforce Development is contributing funds to support training projects.

The panelists emphasized that meeting the semiconductor industry’s talent requirements demands an all-in or whole of society approach. State-local-federal collaboration, industry engagement, university leadership, community and technical college commitment, as well changes to K-12 and career and technical education (CTE) are all needed to meet expected demand for workers. Notably, state leaders also pointed out that these industry initiatives have the potential to catalyze greater change in education and credentialling that should transcend the semiconductor industry and prompt an evolution in the way we approach education, training and workforce development.

To learn more, please see the ITIF website – How Can States Help the CHIPS Act Succeed? Panelist presentations can be downloaded at that link.

This article was written by Ellen Harpel, founder of Smart Incentives. It first appeared on the Smart Incentives website.