Texas State Strategic Capital to Austin

Overview

State Capital Matches Federal Awards

Federal CHIPS Act site selection weighs demonstrated state and local support, and DARPA awards typically require state matching investment. Texas built its programs to win those competitions: the Texas Semiconductor Innovation Fund (TSIF) was created to position Texas for federal CHIPS allocations, and the $552 million appropriation to the Texas Institute for Electronics (TIE) preceded DARPA's $840 million Next Generation Microelectronics Manufacturing (NGMM) award.

Five state tools reach the Austin region: TSIF semiconductor grants, Texas Enterprise Fund (TEF) deal-closing grants, the JETI Act property tax limitation, the direct TIE appropriation, and the constitutional research endowments (the Permanent University Fund and the Texas University Fund). TSIF awards and the TIE appropriation together total roughly $870 million in the Austin region.

Semiconductors

Texas Semiconductor Innovation Fund

Governor Greg Abbott signed the Texas CHIPS Act (House Bill 5174) in June 2023, creating TSIF and the Texas Semiconductor Innovation Consortium (TSIC). The Legislature appropriated $698 million at launch and added $250 million in June 2025, for about $948 million in total. TSIF grants go to state entities, universities and companies with an established Texas presence.

Samsung Austin Semiconductor's $250 million grant (September 2025) supports the Taylor 2-nanometer logic fab and sits alongside its $4.745 billion federal CHIPS award. Other Austin-region grants are listed in the chart above. Coherent's $14.1 million grant (February 2026) funds an indium phosphide wafer fab in Sherman, North Texas, outside the Austin region.

The TSIC advises the Texas CHIPS Office and includes 20 universities, with UT Austin a founding member; the Governor's Office makes the award decisions. See the UT Austin Nexus for the research side.

Incentives

Texas Enterprise Fund and the JETI Act

The 78th Legislature created TEF in 2003 to close deals where a Texas site competes with a viable out-of-state site; it bills itself as the largest fund of its kind in the United States. Through 2024 TEF had funded 213 projects with $878 million in grants, tied to 127,615 committed jobs and $64.5 billion in capital investment. Awards need approval from the Governor, Lieutenant Governor and House Speaker, require 75 jobs in urban areas or 25 in rural areas at or above the county average wage, and pay out only after job and wage targets are met, with clawbacks for shortfalls.

Apple's Austin expansion is the region's best-known TEF deal, tied to its 2012 commitment of 3,600 jobs and its 2018 Williamson County campus. TEF contracts in the region stack with City of Austin Chapter 380 agreements and Travis and Williamson County abatements, covered on County and Municipal Strategic Capital.

The Jobs, Energy, Technology and Innovation (JETI) Act, House Bill 5 of the 88th Legislature, replaced the Chapter 313 program that expired at the end of 2022. It limits school district maintenance and operations (M&O) taxable value to 50 percent for 10 years (25 percent in Opportunity Zones). Thresholds rise from $20 million and 10 jobs in counties under 100,000 people to $200 million and 75 jobs in counties over 750,000; wages must reach 110 percent of the county average, with health benefits and a performance bond.

Research

Texas Institute for Electronics Appropriation

The $552 million TIE appropriation runs through the biennial state budget, outside TSIF, TEF and JETI, which gives TIE longer planning horizons than a performance grant. It funds research and prototyping at the J.J. Pickle Research Campus and the former Sematech plant on Montopolis Drive, led by Principal Investigator S.V. Sreenivasan and CEO John Schreck.

Combined with DARPA's $840 million NGMM award of July 2024, the state money makes TIE a $1.4 billion-plus federal and state research commitment, the largest research facility project in the Austin region. Details are on the UT Austin TIE NGMM Center page.

Endowments

Permanent University Fund and Texas University Fund

The Permanent University Fund (PUF) began in 1876 on 2.1 million acres of West Texas land; the 1923 Santa Rita oil well turned it into one of the largest university endowments in the country, with about $45 billion in net assets by May 2026. Two-thirds of distributions go to the UT System and one-third to the Texas A&M System, funding capital projects, hiring and operations that complement UT Austin's NSF, DOD, DOE and DARPA research.

Texas voters approved the Texas University Fund (TUF) as Proposition 5 in November 2023 with more than 60 percent support. Capitalized at about $3.9 billion ($896 million from the former National Research University Fund plus $3 billion from the budget surplus), TUF supports Texas Tech, the University of Houston, the University of North Texas and Texas State University; UT Austin and Texas A&M are excluded because they draw on PUF.

Texas State University in San Marcos (Hays County) is the Austin-metro TUF beneficiary. Eligibility requires $20 million in annual research spending for three years and an average of 45 doctorates a year; 75 percent of distributions are split equally and 25 percent follow research spending and doctorates. The Texas Research University Fund (TRUF) and National Research Support Fund (NRSF) add smaller research streams.

Related coverage

Related Coverage

• Austin CapEx Nexus
• Federal Strategic Capital to Austin
• County and Municipal Strategic Capital
• Austin Region Strategic Private Capital
• UT Austin TIE NGMM Center
• The JETI Act