Texas Instruments Incorporated (TXN) shares are experiencing an upward surge on Friday, fueled by the company’s anticipated receipt of up to $1.6 billion in direct funding from the U.S. Department of Commerce. This financial boost is part of the CHIPS and Science Act, a landmark legislation aimed at revitalizing domestic semiconductor production.
The investment will be instrumental in supporting the construction of three state-of-the-art 300mm semiconductor wafer fabrication facilities (fabs) across Texas and Utah. Texas Instruments expects to receive an additional $6 billion to $8 billion from the U.S. Department of Treasury’s Investment Tax Credit, designed to encourage qualified U.S. manufacturing investments. Furthermore, the company anticipates receiving $10 million in proposed funding for workforce development programs.
These funding sources will bolster Texas Instruments’ ambitious $18 billion investment plan, spanning from now until 2029, and contributing significantly to the company’s overall manufacturing expansion.
The funding will be specifically allocated to the development of three new wafer fabs: two in Sherman, Texas (SM1 and SM2), and one in Lehi, Utah (LFAB2). The funds will be utilized for:
* Constructing and building the cleanroom for SM1 and completing the pilot line for initial production.
* Constructing and building the cleanroom for LFAB2, enabling the commencement of initial production.
* Building the shell for SM2.
This initiative is poised to create over 2,000 new direct jobs at Texas Instruments, alongside thousands of additional indirect jobs in construction, supply chains, and supporting industries.
“Our investments further strengthen our competitive advantage in manufacturing and technology as we expand our 300mm manufacturing operations in the U.S.,” stated Haviv Ilan, president and CEO of Texas Instruments. “With plans to grow our internal manufacturing to more than 95% by 2030, we’re building geopolitically dependable,” Ilan added.
The United States is actively advancing domestic semiconductor production through the CHIPS Act, enacted in 2022. This legislation provides up to $52.7 billion in funding, including $39 billion in subsidies for semiconductor manufacturing and $11 billion for research and development.
“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,” emphasized U.S. Secretary of Commerce Gina Raimondo.
TXN shares are currently trading higher by 1.27% at $204.50 in premarket trading on Friday.
This funding signifies a crucial step towards bolstering the U.S. semiconductor industry, ensuring a reliable domestic supply chain for vital technologies used across various sectors of the economy. Texas Instruments’ expansion plans, backed by the CHIPS Act funding, are expected to have a significant positive impact on both the company and the U.S. economy.
