Texas Instruments (TI), which makes chips for Apple, Ford, and SpaceX, says it is making the biggest investment in “foundational semiconductor manufacturing in US history” with a $60 billion fab expansion.
TI said it would invest the money in either ramping production or construction at seven fabs or chip factories in Texas and Utah. (Five are already producing or have been previously announced.)
CEO Haviv Ilan said this week TI would be working with the US government on its plans to build “dependable, low-cost 300mm capacity at scale”, with Commerce Secretary Howard Lutnick describing a partnership to “support US chip manufacturing for decades.”
TI confirmed a $1.6 billion grant under the country’s CHIPS Act in December and said it expected to save a further $6-8 billion in tax credits.
CEO Ilan earlier told investors in April that customers "don't ask for domestic manufacturing plant. They ask us for a dependable capacity footprint, and that's what we have” – the century-old business has 15 manufacturing sites in total, including the three newer sites, across North America, Europe and East Asia, shipping ~10 billion units per quarter.
New, or already under construction, fabs
TI’s latest plans include support for continued construction of two 300mm wafer fabs at its “mega-site” in Sherman, Texas, and another two planned, as well as the ramping up of production at its second fab in Richardson, Texas, and construction of two further wafer fabs in Lehi, Utah.
Unlike the GPUs made by AI-giants NVIDIA, the kind of foundational chips made by TI are a basic requirement for nearly all electronic devices. The industry suffered major shortages of these during the global chips crisis between 2020 and 2023, impacting automotive, cloud and even plumbing.
While TI said its new fabs were needed to meet “steadily growing demand” for the chips in light of those shortages, CEO Ilan also outlined 'intensifying' competition from China, where the company currently has just one fab, in a recent earnings call.
Nevertheless, he claimed the company's global footprint was "a good answer to what our customers in China need" and said any global supply troubles could be addressed by changes including shipping from its Japanese plants instead of those in the US.
Government funding
While the president has frequently expressed a desire to repeal the CHIPS Act, signed in 2022, a tax bill currently making its way through Congress could actually increase tax credits from 25% to 30% as lawmakers seek to overcome the high financial barriers keeping the chip industry’s manufacturing largely outside North America and encourage further funding.
Keen to take advantage of this, TI is one of many chip manufacturers to announce billion-dollar investments in the US this year, with Micron increasing its plans by $30 billion to promise a $200 billion investment in the US earlier this month.
Foreign manufacturers have also been falling in line, in March, Taiwan’s TSMC said it would up its US investment by $100 billion, to $165 billion, with plans for three new fabs – as it continues to grapple with some of the cultural differences that have come with building out US facilities.
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