Semiconductor giant Texas Instruments (TI) has announced a massive expansion of its domestic chip manufacturing capacity, including plans for two previously unannounced fabrication plants (fabs). This significant investment, totaling over $60 billion, is poised to dramatically boost chip production within the United States.
Why Boosting US Chip Production Matters
The strategic importance of domestic semiconductor manufacturing has come into sharp focus in recent years. The global pandemic exposed critical vulnerabilities in supply chains, particularly highlighting the U.S.’s over-reliance on imported chips. Strengthening domestic production is now viewed as a crucial matter of national security and economic resilience.
TI’s investment specifically targets the production of foundational analog and embedded processing chips. These components, while often not the most cutting-edge in terms of processing power, are vital “brains” and sensors essential for nearly every electronic system, from cars and medical devices to consumer electronics and defense systems. Ensuring a dependable, domestic supply of these chips is key to avoiding future disruptions and supporting critical industries.
Inside TI’s Expansive US Investment
TI’s commitment represents what the company calls the “largest investment in foundational semiconductor manufacturing in U.S. history.” The $60 billion is allocated across seven fabrication plants located at three strategic megasites in Texas and Utah.
The largest portion of this investment, a staggering $40 billion, is concentrated at TI’s megasite in Sherman, Texas. This funding will support the completion and ramping up of existing fabs (SM1 and SM2), as well as provide early planning funds for the two newly announced plants, designated SM3 and SM4. While no specific timeline was given for the SM3 and SM4 projects, their inclusion signals TI’s long-term vision to meet future demand at scale from this central hub.
Beyond Sherman, the investment also supports accelerating production at the first fab in Richardson, Texas, and both the first and second fabs in Lehi, Utah. These facilities are designed as 300mm fabs, focused on producing the high-volume analog chips critical to TI’s business.
Backed by Government Incentives and Industry Partners
TI’s ambitious expansion is receiving significant backing from the U.S. government through the CHIPS and Science Act of 2022. The company has finalized agreements to receive up to $1.6 billion in direct funding from the Act, alongside potential U.S. Treasury tax credits estimated between $6 billion and $8 billion for its manufacturing investments. An additional $10 million is earmarked for workforce development initiatives.
This initial federal funding package is specifically directed towards supporting three key facilities: two of the large 300mm fabs in Sherman and one in Lehi. TI projects that the construction and operation of these three facilities alone will require an investment exceeding $18 billion through the end of the decade and are expected to create 2,000 new direct jobs. The broader $60 billion investment across all sites is anticipated to support tens of thousands of jobs, including substantial indirect employment in construction and support industries, with some estimates suggesting this could reach over 600,000 jobs across the ecosystem.
The importance of TI’s production is underscored by support from major industry players who rely on its chips. Executives from companies like Apple, Ford, SpaceX, Medtronic, and Nvidia have publicly partnered with TI and expressed support for this expansion. For example, Apple’s own significant U.S. investment plans highlight TI as a key supplier supporting its domestic silicon manufacturing footprint across multiple states.
A Strategic Move for US Competitiveness
TI’s $60 billion commitment is a cornerstone in the broader effort to rebuild and strengthen the U.S. semiconductor ecosystem. By expanding domestic capacity for essential analog and embedded processors, TI is directly addressing a critical segment of the market and enhancing the resilience of supply chains that power countless industries.
This move also solidifies Texas’ position as a burgeoning hub for semiconductor production, attracting substantial state and federal investment alongside major corporate commitments. As the U.S. government continues to distribute CHIPS Act funds to companies like Samsung and Amkor Technology for various types of chip production and packaging, investments like TI’s are vital steps towards achieving a more comprehensive and secure domestic semiconductor future.
