A Texas parcel is not fab-ready because it is near a transmission line, a reservoir, a technical college, or a large incentive announcement. Select a site only after the serving utility, water provider, permitting agencies, workforce partners, and incentive authorities provide written, project-specific evidence for the same production ramp and construction schedule. Compare every candidate with one requirements brief, then advance a site only when its power and water can be delivered on schedule, its permits are achievable, its labor plan is credible, and its incentives survive eligibility and performance conditions.
What “fab-ready” means in Texas
A semiconductor fabrication facility combines unusually large and sensitive electric loads, high-purity process water, chemical and air-emissions controls, specialized labor, heavy construction, and a long equipment-installation sequence. The site decision therefore has two tests:
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- Capacity: Can the location ultimately provide the required electricity, water, wastewater service, labor, transport, and permits?
- Deliverability: Can each requirement be available at the date and reliability level the construction and production plan needs?
Statewide statistics are useful context, not proof for a parcel. The Texas Semiconductor Strategic Plan (2026) attributes 28% of U.S. semiconductor exports in 2024 to Texas and reports more than 51,000 Texans employed in the semiconductor and electronics industry. That employment category includes electronics workers, not only fab employees. The plan also cites a $52.7 billion federal CHIPS and Science Act allocation. None of those figures establishes service capacity, a permit path, or an incentive award for your project.
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1. Freeze one project brief before ranking sites
Site comparisons become meaningless when each location is tested against a different production assumption. Create a signed requirements brief before requesting utility studies or incentive proposals. Update it through formal change control rather than allowing assumptions to drift during negotiations.
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Include the technical and schedule baseline
- Process type, technology assumptions, chemicals, tools, cleanroom concept, and production capacity.
- Annual and peak production, ramp dates, expansion phases, acreage, building footprints, setbacks, and laydown areas.
- Construction start, first tool delivery, tool-installation sequence, commissioning, and target production date.
- Peak, average, ramp, and firm electric loads; power-quality tolerances; backup-generation strategy; and outage consequences.
- Water withdrawal, peak-day demand, quality at the source, ultrapure-water production, cooling, recycling, reuse, wastewater treatment, discharge, and storm-water requirements.
- Hiring by month and occupation, shift pattern, training lead time, wage assumptions, and contractor-to-employee transition.
- Inbound and outbound freight, hazardous-materials handling, supplier access, customer access, rail or highway requirements, and alternative routes.
- Base-case and downside schedule, including the date by which a delayed utility upgrade or permit would stop the project.
Give every candidate the same brief. If one site is evaluated with a smaller first phase or a later energization date, record that as a different scenario instead of treating it as a better site.
2. Prove electric service, not just proximity to infrastructure
Power is primarily a deliverability and schedule problem. A nearby transmission corridor or substation says nothing about available firm capacity, required network work, protection changes, queue position, cost responsibility, or the date service can actually begin.
Request the current interconnection path
Identify the serving distribution or transmission provider and ask for its current large-load process in writing. Confirm the applicable ERCOT requirements as well. ERCOT’s Planning Guide includes Section 9 for large-load interconnection or modification, and the guide is revised over time; use the current version and current forms during diligence.
- State the requested point of interconnection, voltage, phased load, ramp dates, and reliability requirements.
- Ask which feasibility, system-impact, facilities, or equivalent studies are required and what information the utility needs from the project.
- Obtain the study assumptions: coincident peak, power factor, contingency criteria, requested firm service, and treatment of future phases.
- List every upgrade, including substations, transformers, transmission lines, protection, controls, communications, and off-site network work.
- For each item, identify the owner, estimated cost, payment or contribution rule, procurement responsibility, land or easement need, and long-lead equipment.
- Require a milestone schedule from application through study, design, procurement, construction, testing, and energization.
- Ask what could move the date: other queued loads, equipment shortages, permitting, right-of-way acquisition, outages, or a change in the requested load.
- Obtain written assumptions for interim construction power and for each production phase, rather than treating temporary service as proof of permanent capacity.
Use a power evidence register
| Evidence to collect | What it answers | Do not accept as a substitute |
|---|---|---|
| Utility or transmission-provider study letter | Whether the proposed point and load can be studied under current rules | A broker statement that a substation is “nearby” |
| Upgrade scope and cost allocation | What must be built, who pays, and which assumptions control the estimate | A statewide capacity map |
| Milestone schedule with energization date | Whether service matches construction and ramp dates | An undated letter of interest |
| Reliability and contingency assumptions | How the service behaves during planned or unplanned outages | A generic reliability claim for the region |
| Expansion-phase confirmation | Whether later tools can be added without restarting the project | Unused nameplate capacity on a map |
Do not replace this work with a statewide energy-price comparison. Price matters, but the evidence needed for a fab is site-specific service, reliability, construction timing, and the cost of upgrades. A consultant’s estimate is a lead for investigation, not a capacity commitment.
Power red flags
- The provider will not identify the study path or assumes the final load without a signed request.
- The energization date is contingent on an unspecified “system upgrade.”
- Firm service is unavailable during the first production phase, but the financial model assumes it.
- Upgrade costs exclude land, permitting, protection, communications, or long-lead transformers.
- The load profile is expressed only as a single peak number, with no ramp, average, power-quality, or outage-tolerance data.
3. Establish water by source, quality, timing, and drought case
Water diligence must cover more than annual volume. A fab needs the right source, treatment train, delivery pressure and timing, reliable wastewater capacity, and a drought plan that works when competing users are also constrained.
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Build a phased water balance
Have process and facilities engineers prepare a balance for construction, commissioning, first production, full production, and each expansion. Separate:
- Average annual withdrawal and maximum day or hourly demand.
- Raw-water source, legal availability, contract or permit status, pressure, and delivery point.
- Source-water chemistry and pretreatment, filtration, deionization, and ultrapure-water production.
- Cooling towers, chillers, humidification, process tools, fire protection, and domestic uses.
- Recycling and reuse rates, reject streams, chemical treatment, sludge, and hazardous constituents.
- Wastewater treatment capacity, discharge limits, industrial pretreatment, outfall, and emergency storage.
- Drought curtailment rules, alternative sources, storage, tanker or temporary options, and the cost of each contingency.
Ask the water supplier and relevant local entities for written capacity, connection requirements, delivery dates, quality specifications, rate structure, and drought restrictions. Distinguish a contractual commitment from a planning assumption.
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Texas’ state water-planning process incorporates 16 regional plans and evaluates needs and supplies under a repeat of the drought of record. Those plans are strategic inputs; they are not an allocation, service agreement, or guarantee for an individual parcel.
The 2026 Region C plan lists expected use of 8,968 acre-feet per year for a new TI Semiconductor Plant in Grayson County and 3,000 acre-feet per year for an expansion in Collin County. These are planning estimates for named projects in that regional plan. They are not measured consumption and must not be presented as a standard requirement for every fab.
Water evidence register
| Question | Written evidence required |
|---|---|
| Can the source legally serve the project? | Permit, contract, allocation, or supplier confirmation identifying volume and term |
| Will quality support the process? | Recent raw-water data, treatment design basis, and operating specifications |
| Will service arrive on time? | Connection, pipeline, storage, treatment, and commissioning milestones |
| Can wastewater be accepted? | Industrial pretreatment, discharge limits, capacity, and outfall authorization |
| What happens in drought? | Restriction triggers, priority, alternative supply, storage, and recovery plan |
Water red flags
- An annual acre-foot figure is offered without a peak-day profile or quality specification.
- The source is described as “available” but no allocation, contract, or delivery schedule exists.
- Reuse is counted in the financial model before treatment performance has been demonstrated.
- Wastewater discharge is assumed to be available without industrial pretreatment review.
- The drought case is omitted because the regional plan shows adequate long-term supply.
4. Test workforce readiness by occupation and phase
“A large labor pool” is not a staffing plan. Count construction trades, tool installers, process and equipment engineers, process technicians, operators, facilities engineers, environmental health and safety staff, electricians, controls specialists, maintenance technicians, and managers separately. Their hiring dates, skills, wages, shift patterns, and training needs differ.
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Map the labor market
- Define a commute shed using realistic shift-change travel times, not a county-wide population figure.
- Identify technical colleges, universities, apprenticeship providers, veterans’ programs, and incumbent-worker training partners.
- Estimate wages, premiums for night shifts, relocation support, housing availability, and transportation constraints.
- List competing fabs, advanced-manufacturing projects, data centers, utilities, and construction programs that may recruit the same people.
- Model the hiring curve for construction, installation, qualification, production ramp, and steady state.
- Specify which skills can be trained locally, which require relocation, and which must be recruited internationally or from another industry.
The Texas Semiconductor Strategic Plan identifies workforce development as a state objective. On March 31, 2026, the Texas Workforce Commission announced a $5 million ASCEND grant fund and included semiconductor manufacturing among its target industries. Confirm current application windows, eligibility, matching requirements, award timing, and remaining funds with the Commission before including an award in the financing plan.
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| Deliverable | Decision use |
|---|---|
| Occupation-by-month staffing model | Shows whether hiring and training can meet each ramp milestone |
| Training-provider map and capacity letters | Tests whether local programs can deliver the required cohort sizes |
| Compensation and commute analysis | Reveals retention, housing, and shift-coverage exposure |
| Competitor project inventory | Shows whether simultaneous projects could absorb the labor pool |
| Recruitment and relocation plan | Quantifies dependence on workers from outside the region |
5. Screen permitting before buying the incentive story
Permitting can control the critical path even when land, power, and water look attractive. Start with the process description, chemicals, equipment list, emissions estimates, control systems, water and wastewater streams, construction impacts, and land-use constraints.
Air authorization
The Texas Commission on Environmental Quality publishes Air Permit by Rule 106.225 guidance for semiconductor manufacturing and associated applicability checklists. That authorization is available only when its general and specific conditions are met. If the project cannot comply, another New Source Review authorization route may be required. The actual process, equipment, chemicals, emissions, and controls determine the route; the project name alone does not.
Build a permit matrix
| Area | Initial question | Evidence to request |
|---|---|---|
| Air | Can the proposed equipment meet the semiconductor permit-by-rule conditions? | Applicability checklist, emissions calculations, control design, and agency correspondence |
| Water and wastewater | Can withdrawals, treatment, discharge, and storm water be authorized on schedule? | Supplier capacity, pretreatment review, discharge path, and permit milestones |
| Construction and land use | Are zoning, grading, building, fire, hazardous-material, and traffic approvals aligned? | Jurisdictional matrix, pre-application notes, and critical-path dates |
| Community interface | Could local opposition, odor, noise, traffic, or emergency-response limits delay work? | Engagement plan, emergency-service capacity, and documented local coordination |
Begin agency meetings before final site ranking. Record every assumption, requested study, public-notice requirement, dependency, and response date. A permit route that is theoretically available but cannot meet the construction schedule is not a feasible route.
6. Treat incentives as conditional financing, not site capacity
Texas Semiconductor Innovation Fund
The Texas Semiconductor Innovation Fund (TSIF) supports eligible semiconductor projects through grants or matching funds. Its official program information describes potential applicants including state entities, institutions of higher education, and private businesses with an established Texas presence planning qualifying new or expanded projects. The Office of the Texas Governor reports June 2023 appropriations of $698 million and an additional $250 million in June 2025, or approximately $948 million in total appropriations.
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That approximately $948 million is program appropriation context, not money reserved for your company, a probability of award, or a guaranteed amount available in the current application round. Check the current notice, eligible costs, match rules, local-awareness requirements, application deadlines, reporting duties, and clawback provisions.
JETI
The Texas Jobs, Energy, Technology and Innovation (JETI) program is separate from TSIF. The governing statute requires specified Comptroller findings before recommending approval, including that the agreement is a compelling factor in a competitive site selection and that, without it, the applicant would not make the investment in Texas.
For the competitive site-selection finding, the statute identifies workforce, regulatory environment, infrastructure, transportation, market conditions, investment alternatives, and specific incentive information from other potential sites. Therefore, keep a documented comparison of every finalist, not merely a preferred-site narrative.
Compare offers on net value and downside
| Incentive question | What to document |
|---|---|
| Eligibility | Applicant entity, Texas presence, project type, investment, jobs, wages, and timing requirements |
| Value | Grant, match, tax, fee, infrastructure, or other benefit; payment timing and eligible costs |
| Approvals | Required state, county, city, school-district, utility, or board actions |
| Performance obligations | Investment, jobs, wage, construction, operation, reporting, and retention milestones |
| Downside | Repayment, clawback, penalties, expiration, or loss if schedule or employment targets slip |
| Certainty | Signed term sheet, conditional approval, application, or informal discussion |
Never let a headline award compensate for unproven power or water. Put incentive timing into the project finance model only at the level supported by written terms and an approval path.
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Use a weighted score only after each candidate has the same project brief and evidence standard. A high score based on unverified assumptions should be visibly weaker than a lower score backed by utility and agency letters.
| Dimension | Measures to compare | Evidence status to record |
|---|---|---|
| Power | Firm load, study stage, upgrades, cost responsibility, reliability, energization | Written study, conditional commitment, or not stated |
| Water | Source, legal volume, quality, peak demand, treatment, reuse, discharge, drought | Contract or capacity letter, planning estimate, or not stated |
| Workforce | Labor by role, wages, training capacity, commute, housing, competition | Provider commitments and labor analysis, or not stated |
| Permitting | Air route, water and wastewater approvals, land use, community and schedule risk | Agency pre-application record and permit matrix |
| Incentives | Eligibility, net value, approval stage, obligations, clawback, timing | Term sheet or program rules, not announcement alone |
| Logistics | Freight, suppliers, customers, roads, rail, hazardous-material routes, alternatives | Route studies and capacity confirmations |
| Execution risk | Unknowns, dependencies, long-lead items, schedule float, fallback options | Risk register with owner and due date |
For each cell, record the date, issuer, assumptions, expiry, and next action. Use “not stated” when a source has not established a comparable value; do not fill gaps with statewide averages or broker estimates.
8. Use decision gates instead of a single site vote
Gate 1: desktop screen
Reject parcels that cannot meet the brief’s acreage, access, flood, environmental, utility-corridor, or schedule constraints. At this stage, label power, water, labor, permit, and incentive claims as unverified unless a responsible provider has issued evidence.
Gate 2: provider and agency diligence
Request utility studies, water capacity and quality data, permit pre-application feedback, workforce partner capacity, and written incentive requirements. Require the same response package for every finalist.
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Put utility upgrades, water infrastructure, permits, training cohorts, incentive approvals, building completion, tool delivery, and commissioning on one critical-path schedule. Test a delay in each major dependency and show the effect on first production and cash flow.
Gate 4: conditional selection
Select a preferred site only with explicit conditions: acceptable utility study, executable water agreement, viable permit route, funded workforce plan, documented incentive path, and a fallback or termination right if a condition fails.
Gate 5: final commitment
Before land acquisition or irreversible construction spending, refresh every volatile item. Utility rules, grant windows, agency interpretations, water restrictions, labor competition, and equipment lead times can change between screening and financial close.
Common evaluation mistakes and their fixes
- Mistake: treating a nearby substation as capacity. Fix: obtain the current large-load study, upgrade scope, cost allocation, and energization milestones.
- Mistake: using a regional water-plan number as a site commitment. Fix: secure a source-specific volume, quality, delivery, wastewater, and drought package.
- Mistake: counting all semiconductor employment as fab labor. Fix: separate engineers, technicians, operators, construction, facilities, and maintenance, then model hiring by month.
- Mistake: booking a grant announcement as project funding. Fix: model only written eligibility, approval, payment, match, performance, and clawback terms.
- Mistake: assuming an air permit by rule applies automatically. Fix: run the TCEQ 106.225 applicability checklist against actual equipment, chemicals, emissions, and controls.
- Mistake: scoring sites with different ramp assumptions. Fix: issue one controlled brief and one evidence template to every candidate.
- Mistake: postponing community and emergency-service checks. Fix: include local coordination, traffic, hazardous-material response, utilities, and public-notice dependencies in the first permit screen.
A practical Texas fab-site evidence checklist
- Controlled project brief with load, water, staffing, phasing, and schedule assumptions.
- Current ERCOT and serving-provider large-load requirements, including Section 9 applicability where relevant.
- Utility study request, study results, upgrade list, cost responsibility, reliability assumptions, and energization date.
- Phased water balance, source and quality data, treatment concept, reuse, wastewater, discharge, and drought plan.
- Written water-provider capacity and delivery confirmation for each phase.
- Occupation-by-occupation workforce model, training partners, wage and commute analysis, and competitor inventory.
- Current ASCEND terms and eligibility confirmation if training funds are included.
- TCEQ air-permitting applicability record and a complete permit matrix for water, wastewater, construction, land use, and community requirements.
- TSIF and JETI eligibility analysis, written terms, approvals, obligations, payment timing, and downside exposure.
- Single candidate scorecard, dated evidence register, integrated critical path, risk owners, and decision gates.
Bottom line: choose the site with evidence, not headlines
The strongest Texas fab site is the one that can demonstrate synchronized delivery of electricity, water, permits, people, logistics, and incentives under the same phased project brief. Regional plans, state strategy documents, announced appropriations, and nearby infrastructure help identify places worth studying. They do not replace a utility study, water commitment, permit determination, workforce plan, or approved incentive agreement. Keep those documents current, expose every dependency in one schedule, and make site selection conditional on written evidence for the production date that matters.
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