Texas Instruments (TI) (NASDAQ: TXN) and the US Department of Commerce signs a non-binding Preliminary Memorandum of Terms for up to $1.6 billion in proposed direct funding under the CHIPS and Science Act. The fund will support three under construction 300mm wafer fabs in Texas and Utah.
TI further expects to receive an estimated $6 billion to $8 billion from the US Department of Treasury’s Investment Tax Credit for qualified US manufacturing investments.
The proposed funding and the investment will help TI provide a geopolitically dependable supply of essential analog and embedded processing semiconductors.
“The historic CHIPS Act is enabling more semiconductor manufacturing capacity in the U.S., making the semiconductor ecosystem stronger and more resilient,” said Haviv Ilan, president and CEO of Texas Instruments. “Our investments further strengthen our competitive advantage in manufacturing and technology as we expand our 300mm manufacturing operations in the U.S. With plans to grow our internal manufacturing to more than 95% by 2030, we’re building geopolitically dependable, 300mm capacity at scale to provide the analog and embedded processing chips our customers will need for years to come.”
Since its inception 90 years ago, TI has been pioneering the transition from vacuum tubes to transistors and ICs. Today, the company’s chips are essential in almost every type of electronic devices. As a part of TI’s broader investment in manufacturing, the proposed direct funding under the CHIPS Act will support the company’s investment of more than $18 billion through 2029 and support three new wafer fabs, two in Sherman, Texas (SM1, SM2) and one in Lehi, Utah (LFAB2).
The proposed direct funding will help construct and build the SM1 cleanroom and complete pilot line for first production, LFAB2 cleanroom construction for first production and construction of SM2 shell.
These connected, multi-fab sites benefit from shared infrastructure, talent and technology sharing, and a strong network of suppliers and community partners. They will produce semiconductors in 28nm to 130nm technology nodes, which provide the optimal cost, performance, power, precision and voltage levels required for TI’s broad portfolio of analog and embedded processing products.
“With this proposed investment from the Biden-Harris Administration in TI, a global leader of production for current-generation and mature-node chips, we would help secure the supply chain for these foundational semiconductors that are used in every sector of the U.S. economy, and create tens of thousands of jobs in Texas and Utah,” said U.S. Secretary of Commerce Gina Raimondo. “The CHIPS for America program will supercharge American technology and innovation and make our country more secure – and TI is expected to be an important part of the success of the Biden-Harris Administration’s work to revitalize semiconductor manufacturing and development in the U.S.”
With the addition of new wafer fabs, TI will create over 2,000 company jobs in Texas and Utha.
“We are proud to work with Texas Instruments as they build new semiconductor fabs in Sherman and solidify Texas as the best state for semiconductors. Texas Instruments invented the microchip in Texas, and we are honored to be home to TI’s semiconductor manufacturing facilities in Dallas, Richardson and Sherman,” said Texas Gov. Greg Abbott. “With this latest project, TI is building on its more than 90-year legacy in Texas and adding thousands of good-paying jobs for Texans to manufacture critically important technology.”
“By investing in semiconductor manufacturing, we are helping secure this vulnerable supply chain, boosting our national security and global competitiveness, and creating new jobs for Texans,” said U.S. Sen. John Cornyn. “The chipmaking capabilities these resources will enable at Texas Instruments will help the U.S. reclaim its leadership role in the critically important semiconductor industry, and I look forward to seeing more Texas-led advancements in the years to come.”
TI is further enhancing its employees’ skills, expanding internships and creating pipeline programs with a focus on building electronic and mechanical skills. The company is engaged with 40 community colleges, high schools and military institutions across the US to develop future semiconductor talent.
“Utah is thrilled that Texas Instruments is expanding its manufacturing presence in the Silicon Slopes, furthering the impact Utahns have on critical semiconductor technology,” said Utah Gov. Spencer Cox. “This investment in semiconductor manufacturing not only creates more jobs, but also brings supply chains back to the United States.”
“This proposed CHIPS funding will further support Texas Instruments’ investment in its new semiconductor fab in Lehi —and enhance Utah’s vital role in our national defense and economic success,” said U.S. Senator Mitt Romney. “I was an original sponsor of the CHIPS and Science Act—which made today’s announcement possible—because in order to compete on the world stage, we must continue to promote innovation, foster scientific talent, and expand research here at home. Texas Instruments’ expanded operations will help make the United States more self-reliant for chips essential to our national security and economy.”
As per its long-standing commitment to responsible, sustainable manufacturing and environmental stewardship, TI’s new 300mm wafer fabs will be entirely powered by renewable electricity. Additionally, all of its new 300mm fabs are designed to meet LEED Gold standards for structural efficiency and sustainability. TI’s 300mm manufacturing facilities bring advantages in reducing waste and improving water and energy consumption per chip.
