Introduction
U.S. semiconductor industry Texas Instruments has achieved a major milestone by securing a preliminary agreement with the U.S. Department of Commerce. The agreement will provide up to $1.6 billion in funding under the CHIPS and Science Act.
This substantial investment will significantly boost TI’s manufacturing capabilities, support the construction of new semiconductor fabs, and drive economic growth and job creation in both Texas and Utah.
Here’s a detailed look at this pivotal announcement and its implications for the semiconductor industry.
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Key Takeaways
- Major Funding Boost: Texas Instruments has secured up to $1.6 billion in CHIPS Act funding to support the construction of new semiconductor fabs in Texas and Utah.
- Additional Support: TI is expected to receive $6 billion to $8 billion in investment tax credits and $10 million for workforce development.
- Economic Impact: The new fabs will create over 2,000 direct jobs and thousands of indirect jobs, benefiting local economies in Sherman, Texas, and Lehi, Utah.
- Sustainability Commitment: The new facilities will be powered by renewable electricity and designed to meet LEED Gold standards for environmental efficiency.
- Strategic Expansion: TI’s investment is part of a broader strategy to enhance U.S. semiconductor manufacturing capabilities and reduce reliance on foreign production.
A Critical Investment in Semiconductor Manufacturing
Texas Instruments (TI) is investing a substantial $18 billion to expand its semiconductor manufacturing capabilities in the United States. To support this massive investment, the company is seeking financial incentives from the U.S. government through two primary channels:
1. CHIPS Act Funding:
- $1.6 billion in direct funding: TI has secured a preliminary agreement with the U.S. Department of Commerce for up to $1.6 billion in direct grants under the CHIPS and Science Act. This money will be used to support the construction of three new semiconductor fabrication plants (fabs) in Texas and Utah.
2. Investment Tax Credit:
- $6 billion to $8 billion in tax credits: TI anticipates receiving significant tax credits from the U.S. Department of Treasury. These credits are part of the Investment Tax Credit program, designed to incentivize companies to invest in domestic manufacturing.
In essence:
- TI is committing $18 billion of its own funds to build new semiconductor factories.
- The U.S. government is offering $1.6 billion in direct grants and potentially $6 to $8 billion in tax breaks to encourage this investment.
Why is this important?
- Boosting domestic semiconductor production: This investment helps strengthen the U.S. semiconductor supply chain, reducing reliance on foreign manufacturers.
- Job creation: The project is expected to create over 2,000 direct jobs and thousands of indirect jobs.
- Economic growth: Semiconductor manufacturing is a high-tech industry that can drive economic growth and innovation.
By combining its own capital with government support, TI aims to expand its manufacturing capacity, create jobs, and contribute to the overall strength of the U.S. semiconductor industry.
This funding aims to secure a reliable and geopolitically stable supply of essential chips. The investment will support industries like automotive, healthcare, and smart technology.
The funding will directly support the construction of cleanrooms and production facilities in three new fabs:
- Sherman, Texas: Two fabs, SM1 and SM2, with SM1’s cleanroom and pilot line for first production, and SM2’s shell under construction.
- Lehi, Utah: The LFAB2 cleanroom will also be prepared for first production.
These advanced 300mm wafer fabs will focus on producing chips in technology nodes from 28nm to 130nm.
This range strikes a balance between cost, performance, power efficiency, precision, and voltage levels that are essential to TI’s broad portfolio of analog and embedded processing products.
Strengthening the U.S. Semiconductor Ecosystem
Texas Instruments is one of the largest manufacturers of analog and embedded processing semiconductors in the United States, with over 90 years of technological innovation.
The company’s products are fundamental to many industries, powering everything from advanced automotive safety systems to life-saving medical devices and smart home appliances.
Haviv Ilan, president and CEO of Texas Instruments, highlighted the importance of these investments:
“The historic CHIPS Act boosts U.S. semiconductor manufacturing capacity. It strengthens and makes the semiconductor ecosystem more resilient. Our investments enhance our manufacturing and technology edge. We’re expanding our 300mm operations in the U.S. Our goal is to grow internal manufacturing to over 95% by 2030. We’re building reliable, geopolitically stable capacity. This will meet our customers’ needs for analog and embedded processing chips for years.”
U.S. Government Backs Semiconductor Growth
The Biden-Harris Administration has been a key player in revitalizing the U.S. semiconductor industry. Gina Raimondo, U.S. Secretary of Commerce, remarked on the impact of the CHIPS for America program:
“With this proposed investment from the Biden-Harris Administration, TI, a leader in current-generation and mature-node chips, will secure the supply chain for essential semiconductors. These chips are vital across every U.S. economic sector. The investment will also create tens of thousands of jobs in Texas and Utah.”
Senator John Cornyn of Texas added:
“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.”
These endorsements reflect a broader national strategy to strengthen domestic semiconductor production, reduce reliance on overseas suppliers, and enhance national security by securing a stable chip supply chain.
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Workforce Development and Job Creation
Texas Instruments’ chips investment will boost its technological capabilities and significantly impact job creation. The company expects to add over 2,000 direct jobs at its three new fabs.
The investment will create thousands of additional jobs in construction, supply chains, and supporting industries.
Texas Governor Greg Abbott praised TI’s role in the state’s semiconductor sector. He highlighted TI’s 90-year legacy in Texas and the creation of thousands of good-paying jobs.
TI is also focused on building a future-ready workforce. The company is investing in educational and internship programs to develop electronic and mechanical skills.
TI has partnered with 40 community colleges, high schools, and military institutions across the U.S. to nurture future semiconductor talent.
Sustainable Manufacturing and Environmental Commitment
TI’s commitment to sustainable manufacturing practices is a key element of its expansion strategy.
The company’s new 300mm fabs will run entirely on renewable energy. They are designed to meet LEED Gold standards for efficiency and sustainability.
These fabs will help reduce waste and improve water and energy use per chip.
TI’s 300mm wafer technology aims to create smaller, more energy-efficient semiconductors. These products will help customers lower their environmental impact and drive innovation in electrification and renewable energy.
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Conclusion
Texas Instruments’ $1.6 billion CHIPS Act funding agreement represents a critical step in bolstering U.S. semiconductor manufacturing. This investment will boost domestic production capabilities and create thousands of jobs.
It will also strengthen and make the semiconductor supply chain more resilient and sustainable.
As TI leads in semiconductor innovation, its efforts will support the U.S. economy and drive technological advancement in the coming years.
