Texas Instruments (TI) has reached a preliminary agreement with the U.S. Department of Commerce for up to $1.6 billion in proposed funding under the CHIPS and Science Act. This significant investment aims to bolster the company’s semiconductor manufacturing capabilities through the construction of three 300mm wafer fabs located in Texas and Utah.

Texas Instruments’ Major Expansion Under CHIPS Act

Texas Instruments (Nasdaq: TXN) is poised to receive substantial financial backing under the CHIPS and Science Act, with up to $1.6 billion in proposed direct funding from the U.S. Department of Commerce. This funding is earmarked to support the development of three new 300mm wafer fabrication facilities currently under construction in Sherman, Texas, and Lehi, Utah. Alongside this, TI anticipates receiving between $6 billion and $8 billion from the U.S. Department of Treasury’s Investment Tax Credit for qualified domestic manufacturing investments. This combined financial support is set to enhance TI’s ability to produce essential analog and embedded processing semiconductors, crucial for a reliable and geopolitically stable supply chain.

Haviv Ilan, President and CEO of Texas Instruments, emphasised the historic nature of the CHIPS Act in enhancing U.S. semiconductor manufacturing capacity. He highlighted that TI’s investment, which aims to increase its internal manufacturing to over 95% by 2030, will solidify the company’s competitive edge in the semiconductor sector. TI’s expansion efforts include the construction of two facilities in Sherman, Texas (SM1 and SM2), and one in Lehi, Utah (LFAB2). These facilities are designed to support the production of semiconductors with technology nodes ranging from 28nm to 130nm, catering to TI’s extensive portfolio of products.

Impact on Semiconductor Supply Chain and Employment

The proposed CHIPS Act funding will facilitate TI’s investment of more than $18 billion through 2029. This investment is crucial for the development of the new wafer fabs, which will significantly contribute to the stability of the semiconductor supply chain in the U.S. U.S. Secretary of Commerce Gina Raimondo praised the initiative, noting that it would strengthen the semiconductor ecosystem and create tens of thousands of jobs across Texas and Utah. The expansion is expected to generate over 2,000 direct jobs at TI and thousands more in related sectors, including construction and supply chains.

Texas Governor Greg Abbott and U.S. Senator John Cornyn also underscored the positive implications of the investment for local employment and national security. The expansion is not only anticipated to boost local economies but also enhance the U.S.’s position in the global semiconductor industry. Utah Governor Spencer Cox and U.S. Senator Mitt Romney echoed these sentiments, highlighting the strategic importance of the expansion for national defense and economic resilience.

Commitment to Sustainable Manufacturing

Texas Instruments has a strong commitment to sustainable manufacturing practices. The new 300mm wafer fabs are set to operate entirely on renewable electricity and are designed to meet LEED Gold standards for sustainability. TI’s investment in these facilities will support its efforts to reduce energy, material, and water consumption, as well as greenhouse gas emissions. The company’s dedication to responsible manufacturing aligns with its broader goal of advancing environmental stewardship while driving technological innovation.

The funding agreement between Texas Instruments and the U.S. Department of Commerce marks a significant milestone in U.S. semiconductor manufacturing. By enhancing its production capabilities through the CHIPS and Science Act, TI is positioning itself as a leader in the industry while contributing to national security and economic growth. The expansion promises not only to fortify the semiconductor supply chain but also to drive advancements in sustainable manufacturing practices.

  CHIPS and Science Act, Haviv Ilan, LEED Gold standards, Lehi Utah, renewable energy, semiconductor manufacturing, Sherman Texas, Texas Instruments, U.S. Department of Commerce