Texas Instruments Secures Up to $3 Billion in CHIPS Act Loans to Boost U.S. Semiconductor Manufacturing

Texas Instruments Secures Up to $3 Billion in CHIPS Act Loans to Boost U.S. Semiconductor Manufacturing
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Texas Instruments (TI) is set to receive between $1.6 billion and $3 billion in loans from the U.S. government as part of the CHIPS and Science Act, according to an announcement by the U.S. Commerce Department on Friday. This funding comes in the form of a preliminary memorandum of terms (PMT) to support TI's ambitious $18 billion investment in expanding domestic semiconductor manufacturing by the end of the decade.

CHIPS Act Aims to Bolster U.S. Semiconductor Independence

The CHIPS and Science Act, signed into law two years ago by President Biden, allocated $53 billion to enhance U.S. semiconductor production and design, reducing dependency on foreign suppliers. This move is seen as crucial for national security and economic stability, particularly after the pandemic highlighted vulnerabilities in the global semiconductor supply chain.

TI's Manufacturing Expansion Plans

As part of its expansion plan, Texas Instruments will construct three wafer fabrication plants—two in Texas and one in Utah—focused on producing embedded and analog chips using 300mm-diameter wafers. These fabs will primarily manufacture chips using 65nm to 130nm process node technology, which, while not cutting-edge, remains essential for a wide range of applications from household appliances to automotive engine control units. By 2030, TI's CEO, Haviv Ilan, anticipates that the company's internal manufacturing capacity will grow by more than 95%.

Importance of Mature-Node Chips

While these mature-node chips may not be as advanced as the leading-edge silicon developed by companies like Intel, TSMC, and Samsung, they are still vital to many industries. The CHIPS Act funding aims to address the shortages of these current-generation and mature-node chips, which during the pandemic caused significant disruptions across various sectors, including automotive manufacturing. Companies like Toyota were forced to halt production due to the lack of essential semiconductors, illustrating the critical need for reliable domestic production.

Reducing U.S. Dependence on Foreign Chip Fabs

Beyond preventing future supply chain disruptions, the CHIPS Act also seeks to reduce U.S. reliance on semiconductor manufacturing in the Asia-Pacific region, especially in light of escalating trade tensions with China. The Commerce Department views this funding as a strategic move to strengthen national security by ensuring a stable and secure supply of semiconductors produced on American soil.

TI’s Strategic Role in U.S. Semiconductor Industry

Texas Instruments’ expansion is a key component of the broader strategy to fortify the U.S. semiconductor industry. While the focus remains on current and mature-node chips, TI’s efforts will play a crucial role in maintaining the country’s technological edge and securing its supply chains in an increasingly volatile global market.