[News] TI to Receive USD 1.6 Billion Funding for Building Three 300mm Fabs

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On August 16, the U.S. government announced a preliminary agreement with Texas Instruments (TI) to propose up to USD 1.6 billion in direct funding through the CHIPS and Science Act to support three 300mm semiconductor wafer fabrication plants (Fabs) under construction in Texas and Utah. Two of them (SM1 and SM2) is located in Sherman, Texas, and one (LFAB2) in Lehi, Utah.

Haviv Ilan, President and CEO of Texas Instruments, stated that the company plans to increase its internal manufacturing rate to over 95% by 2030, and is currently expanding its 300mm wafer capacity to meet customer demand for analog and embedded processing chips in the coming years.

The funds will respectively be used to build the clean room for SM1 and complete the initial production pilot line, construct the clean room for LFAB2 to start initial production, and build the shell for SM2. In addition to the funding, the U.S. government will also provide up to USD 3 billion in loans to TI.

Moreover, TI expects to receive an estimated USD 6 billion to USD 8 billion from the U.S. Department of Treasury’s Investment Tax Credit for qualified U.S. manufacturing investments, which will support the company’s investment of over USD 18 billion in building the new facilities.

Previously, TI announced the plan to spend USD 30 billion to construct up to four interconnected wafer fabs (SM1, SM2, SM3, SM4) to meet customer demand for the coming decades.

As per its 2022 plan, TI will build six new 300mm wafer fabs by 2030. Among them, RFAB2 in Richardson, Texas, and the LFAB plant acquired from Micron began production in 3Q22 and 1Q23, respectively. Two of the four Sherman plants completed construction in 2023, with the remaining two to start construction between 2026 and 2030.

Aside from the above mentioned plan, TI announced the construction of a second 300mm fab in Lehi, Utah in February 2023, which commenced construction in the second half of 2023 and is expected to start production as early as 2026.

This fab will primarily produce analog and embedded processing chips. It is adjacent to the existing 300mm wafer fab LFAB. Once completed, the two fabs will be merged into a single operation.

Looking forward, TI aims to achieve revenue of USD 45 billion by 2030, more than doubling its 2022 revenue. The company targets a compound annual growth rate (CAGR) of 7% over the next decade, compared to an average growth rate of 4% from 2010 to 2020.

To achieve this, TI has revised its capital expenditure plans, increasing its annual capital spending to USD 5 billion for 2023-2026, with capital expenditures accounting for 10%-15% of revenue after 2027.

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(Photo credit: Texas Instruments)