March 2025
In this Issue...
Who We Are
Published By
Texas Home to Billions’ Worth of Manufacturing Plant Expansions Under Construction
While grassroot efforts lead all types of manufacturing projects underway in Texas, more than 30% of the spend is attributed to plant expansions--most of which is attributed to a high-dollar semiconductor project and the build-out of data centers. The highest-valued project is the roughly $7 billion second phase (SM2) of Texas Instruments Incorporated's (NASDAQ:TXN) (Dallas, Texas) semiconductor plant in Sherman, Texas, about 60 miles north of Dallas; the grassroot construction (SM1) also is underway, and both projects are expected to wrap up by this summer. The two projects entail building out 2 million square feet of space to manufacture 300-millimeter wafers for automobiles and other electronic applications. In Texas Instruments’ capital management review webcast on February 4, Chief Executive Officer Rafael Lizardi provided an update on the project: “In Sherman, we continue installing tools on the floor in SM1, and we are beginning technology qualification. The construction of SM2 is progressing well, with the shell expected to be complete this year.” Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can read detailed project reports on Phase I and Phase II. The Texas Legislature has been working to boost the state’s semiconductor manufacturing capacity. In 2023, Governor Greg Abbott (R) signed the Texas Chips Act into law, which is designed to leverage the state’s investments in the semiconductor industry, encourage semiconductor-related companies to expand in the state, and develop further research and development (R&D) capacity at higher education institutions, according to a white paper on the law. Lawmakers appropriated $698 million for Texas Chips Act funding as well as more than $660 million to build R&D facilities at The University of Texas at Austin and Texas A&M University. “Today, Texas is the top state for semiconductor manufacturing, having led the nation for 12 years in the export of semiconductors and other electronic components,” Abbott said in the white paper. “Significant industry investments announced in Texas in the last two years will further accelerate domestic semiconductor manufacturing, reducing reliance on foreign production and supply chains and further ensuring our nation’s security. Texas has the innovation, the infrastructure and the talent to continue to lead the American resurgence in critical semiconductor manufacturing and the technologies of tomorrow.” One of those burgeoning technologies is artificial intelligence (AI). A major project aimed at building out data center capacity for AI is the second-phase expansion and grassroot construction of the first site (in Abilene) as part of Project Stargate--a high-profile joint venture that could feature up to $500 million worth of private investment. Stargate will provide supercomputing capacity for OpenAI (San Francisco, California). OpenAI, Oracle (NYSE:ORCL) (Austin, Texas) and SoftBank (Tokyo, Japan), who are are the main partners for Stargate. Stargate initially is expected to utilize up to roughly 100,000 NVIDIA (NASDAQ:NVDA) (Santa Clara, California) graphics processing units (GPU). Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington) also plays a major role, including serving as another project investor, building the supercomputers and integrating its Azure cloud platform that will host and manage the Stargate infrastructure. Arm (Cambridge, U.K.), a majority-owned subsidiary of SoftBank, will provide central processing units. Eight more data centers are planned for the Abilene site in future years. Subscribers can click here for a list of related project reports at the Abilene site, which includes the first two phases that are expected to wrap up by the end of 2026. OpenAI has said the partners are exploring other locations for Stargate’s additional campuses. Meanwhile, Compass Datacenters (Dallas, Texas) is expanding its data center campus in Red Oak by adding a 251,815-square-foot data center building featuring 52 megawatts of power. General contractor Brasfield & Gorrie (Birmingham, Alabama) is expected to wrap up this fifth-phase construction in late 2025 or 2026. Subscribers can learn more by viewing the project report. Industrial Info also is tracking expansions underway at cargo ports across the state, including two expansions at the Bayport Container Terminal in the Port of Houston: a $50 million project will add a new 40-acre container yard, while a $20 million project entails adding a 1,000-foot wharf and its associated infrastructure. Subscribers can read detailed reports on the container yard and wharf expansion projects, which are expected to wrap up around the end of 2025 and 2026, respectively. The port recently reported $630 million in total capital investments for 2024.
