USA Rare Earth Secures $14.2M Texas Grant for Critical Minerals Project in West Texas

USA Rare Earth received a $14.17 million Texas Semiconductor Innovation Fund grant to accelerate rare earth mineral production at its Round Top Mountain project in Hudspeth County, a development tied to Texas’ strategy to expand domestic supply chains for semiconductors, advanced manufacturing, and defense technologies.

The project is expected to create 260 jobs and represents more than $1.4 billion in capital investment in Far West Texas, adding a critical minerals component to the state’s broader technology and manufacturing ecosystem.

Critical minerals for advanced technologies

USA Rare Earth plans to develop the Round Top Mountain deposit as a domestic source of heavy rare earth elements and select technology metals. The site contains an estimated one billion tons of material and 15 of the 17 rare earth elements, according to the governor’s announcement.

These materials are essential for high-performance permanent magnets used in semiconductor manufacturing, electric vehicles, physical AI, robotics, and advanced defense systems. Their availability has become increasingly strategic as manufacturers and governments seek to reduce dependence on foreign supply chains.

Texas expands its semiconductor supply chain strategy

The grant was awarded through the Texas Semiconductor Innovation Fund, created under the Texas CHIPS Act to support semiconductor research, design, manufacturing, and related economic development projects. The program has received approximately $948 million in total appropriations since its creation.

For Texas, the USA Rare Earth project extends the semiconductor conversation beyond chip fabrication alone. By supporting critical minerals production in Hudspeth County, the state is adding upstream capacity to the value chain that powers semiconductors, electric mobility, AI, robotics, and national security technologies.