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Industrial Growth in Texas: Advanced Manufacturing Is Reshaping the State
Texas’ industrial growth story is becoming increasingly tied to advanced manufacturing. Semiconductor fabrication, artificial intelligence hardware, automotive production and specialized technology suppliers are driving some of the largest new industrial investments in the state.
From Terafab in Grimes County to Texas Instruments in Sherman and new AI-related manufacturing in North Texas, these projects are creating industrial clusters that extend well beyond the primary manufacturing facilities.
Terafab Could Transform Grimes County
One of the most significant recent announcements is SpaceX’s Terafab project in Grimes County, northwest of Houston and southeast of College Station.
The first phase of the vertically integrated semiconductor fabrication facility represents more than $16.8 billion in capital investment and is expected to create approximately 3,000 jobs. Texas also approved a $30 million Texas Enterprise Fund grant for the project. Texas Government
The project is significant not only because of its size, but because of the secondary industrial activity a semiconductor campus can generate. Specialized suppliers, contractors, equipment manufacturers, logistics providers and service companies may seek locations nearby, potentially creating additional demand for industrial land, manufacturing buildings and flex space throughout the surrounding region.
For commercial real estate, infrastructure will be a major part of that story. Semiconductor manufacturing requires substantial power, water, transportation access and specialized facilities, making infrastructure capacity increasingly important in industrial site selection.
Sherman Continues to Build a Major Semiconductor Cluster
North Texas is already seeing the impact of large-scale semiconductor investment.
Texas Instruments has begun production at its first new 300-millimeter semiconductor fab in Sherman. The company's long-term plan calls for as many as four connected fabs at the site, representing potential investment of approximately $40 billion and supporting about 3,000 direct TI jobs, plus thousands of indirect jobs. Texas Instruments
The scale of TI's investment is helping establish Sherman as an important semiconductor manufacturing hub. As production expands, supporting businesses—from equipment suppliers and testing companies to logistics and maintenance providers—can create additional demand throughout the surrounding industrial market.
This clustering effect is one of the key ways advanced manufacturing differs from traditional warehouse development. A major manufacturing facility can become an economic anchor around which an entire network of related industrial users develops.
AI Manufacturing Is Expanding in North Texas
Artificial intelligence is adding another dimension to Texas' manufacturing growth.
Taiwanese electronics manufacturer Wistron opened a $700 million Texas factory to manufacture Nvidia AI systems. The investment reflects a broader movement toward expanding U.S.-based production of the hardware needed to support rapidly growing AI infrastructure. Reuters
Texas is also attracting companies manufacturing components that support AI and advanced computing. LITEON, for example, is establishing a North American headquarters and advanced manufacturing operation in McKinney focused on AI power and infrastructure-related products. The initial phase represents approximately $307 million in investment and 500 jobs. Texas Government
These facilities tend to have different real estate requirements from conventional logistics operations. Power capacity, specialized mechanical systems, security, skilled labor and proximity to suppliers can all play a greater role in location decisions.
The Semiconductor Supply Chain Is Filling In
Texas' semiconductor growth is also attracting specialized suppliers.
FormFactor is establishing a new probe-card manufacturing facility in Farmers Branch. The project is expected to create more than 600 jobs and represents approximately $140 million to $170 million in capital investment. Probe cards are specialized testing components used during semiconductor manufacturing. Texas Government
This type of investment is important because a successful semiconductor market requires much more than fabrication plants. Testing, equipment manufacturing, advanced materials, precision components, logistics and research operations all form part of the broader ecosystem.
As more of these companies locate near Texas' major manufacturing campuses, industrial demand can spread across multiple property types and building sizes.
Industrial Growth Extends Beyond Technology
Advanced technology is not the only sector driving large Texas manufacturing projects.
Toyota is expanding its San Antonio manufacturing operation with a second vehicle assembly line. The project represents approximately $3.6 billion in capital investment, is expected to create about 2,000 jobs, and will double the company's existing manufacturing footprint there. Texas Government
The project reinforces a broader trend: Texas' industrial market is becoming increasingly diversified across semiconductors, AI hardware, automotive manufacturing, aerospace and other advanced-production industries.
What It Means for Texas Industrial Real Estate
The next phase of Texas industrial growth may be less about simply building more warehouse space and more about building the right infrastructure in the right locations.
For developers and investors, power, water, labor availability, transportation infrastructure and proximity to major manufacturing clusters are becoming increasingly important. Large industrial campuses can also create opportunities well beyond their own footprints as suppliers and service companies establish nearby operations.
For communities outside the traditional industrial centers of Dallas-Fort Worth, Houston, Austin and San Antonio, projects such as Terafab demonstrate how a single major investment can potentially establish an entirely new industrial corridor.
Texas has long benefited from population growth, transportation infrastructure and available land. Increasingly, its industrial growth is also being shaped by semiconductors, AI, advanced manufacturing and the supply chains supporting those industries.
That shift could create a more specialized and geographically diverse industrial market across the state in the years ahead.
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