The U.S. Department of Commerce has proposed up to $1.6 billion in direct funding for Texas Instruments (TI) under the CHIPS and Science Act. In addition to direct funding, TI anticipates receiving an estimated $6 billion to $8 billion from the U.S. Department of Treasury’s Investment Tax Credit for qualified U.S. manufacturing investments. A non-binding Preliminary Memorandum of Terms has been signed between TI and the U.S. Department of Commerce, outlining these proposed funds.
Other tech leaders, including Intel and SK Hynix, have also secured significant funding through the CHIPS Act, reinforcing the industry’s strategic importance in the U.S. economy. However, as the largest U.S. manufacturer of analog and embedded processing semiconductors, Texas Instruments chips plays an especially crucial role. Texas Instruments CHIPS Act funding is positioned to boost their ability to provide a geopolitically dependable supply of essential analog and embedded processing semiconductors.
Texas Instruments CHIPS Act Funding Allocations
Texas Instruments CHIPS Act funding will be allocated towards the construction of semiconductor wafer fabs and workforce development.
Semiconductor Wafer Fabs
The $1.6 billion in funding will support the construction of three 300mm semiconductor wafer fabs in Texas and Utah.
The President and CEO of Texas Instruments stated “The historic CHIPS Act is enabling more semiconductor manufacturing capacity in the U.S., making the semiconductor ecosystem stronger and more resilient. 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.” – Haviv Ilan
The proposed direct funding under the CHIPS Act is set to boost TI’s planned investment of over $18 billion through 2029, forming a key part of the company’s broader commitment to manufacturing. This funding will specifically support the development of three new wafer fabs—two in Sherman, Texas (SM1 and SM2), and one in Lehi, Utah (LFAB2). These funds will be used to:
- Construct and equip the SM1 cleanroom and complete the pilot line for initial production;
- Build and equip the LFAB2 cleanroom for its first production run;
- Construct the SM2 shell.
These interconnected, multi-fab sites will benefit from shared infrastructure, talent, and technology, along with a strong network of suppliers and community partners. They will focus on producing semiconductors within the 28nm to 130nm technology nodes, delivering the optimal balance of cost, performance, power, precision, and voltage required for TI’s extensive range of analog and embedded processing products.
Premier Access to TI Components with Microchip USA
Microchip USA is positioned to meet the rising demand for components produced in Texas Instruments’ new wafer fabs, ensuring that you have consistent access to essential products. Our comprehensive services are tailored to enhance supply chain efficiency and optimize cash flow for our clients. By leveraging our strong relationships with OEMs and CMs, we offer innovative, cost-opportunistic deals that directly benefit our clients’ operations. Additionally, you can expect a reliable and consistent supply of high-quality, domestically produced components.
By partnering with Microchip USA, you can be confident in your ability to navigate the complexities of the semiconductor market, knowing that you are backed by a distributor that is committed to transparency, innovation and efficiency.
Building a Strong Future Workforce
Texas Instruments CHIPS Act funding also encompasses $10 million in proposed allocations for workforce development. TI plans to create over 2,000 new jobs across their three new fabs, as well as thousands of indirect jobs related to construction, suppliers, and supporting industries.
The Governor of Texas stated “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.” – Governor Greg Abbot
To build a future ready workforce, TI is not only upskilling its current employees but also expanding internships and creating pipeline programs focused on developing electronic and mechanical skills. TI maintains strong partnerships with 40 community colleges, high schools, and military institutions across the U.S. to cultivate the next generation of semiconductor talent.
Sustainable Manufacturing
Texas Instruments is committed to responsible, sustainable manufacturing and environmental stewardship. To uphold this commitment, TI consistently invests in its fabrication processes and equipment to minimize energy, material, and water consumption, as well as greenhouse gas (GHG) emissions.
Texas Instruments CHIPS Act funding will support the construction of 300mm wafer fabs that will operate entirely on renewable electricity. Additionally, all new 300mm fabs are designed to achieve LEED Gold certification for structural efficiency and sustainability. These manufacturing facilities offer significant advantages in reducing waste and optimizing water and energy use per chip.
Tech Expert Analysis
A tech industry expert at Stock Titan shared insight on Texas Instruments CHIPS Act funding and investments, noting that TI’s new wafer fabs are a strategic move to leverage the increasing demand for analog and embedded processing chips. These components are critical in various applications, from automotive to industrial and consumer electronics.
The company’s plan to increase internal manufacturing to over 95% by 2030 was also highlighted. This vertical integration strategy could provide TI with greater control over its supply chain and potentially lead to improved product quality and faster time-to-market.
Finally, TI’s focus on establishing a geopolitically reliable capacity is timely. This expansion could strengthen TI’s position as a dependable supplier to U.S.-based customers, potentially leading to increased market share and stronger customer relationships in the long run.
Looking Ahead
Texas Instruments CHIPS Act funding is sure to have a profound impact on the semiconductor industry, particularly analog and embedded processing semiconductors.
U.S. Senator John Cornyn stated, “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. 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.”
