Texas Instruments Inc is set to receive US$1.6 billion in CHIPS Act grants and US$3 billion in loans, the administration of US President Joe Biden said on Thursday, the latest major award from a program designed to boost US semiconductor manufacturing.
The funding would help pay for one factory in Utah and two in Texas — projects that would cost about US$18 billion through 2029 — the US Department of Commerce said in a statement. The effort is expected to generate about 2,000 manufacturing jobs and thousands more in construction.
In total, Texas Instruments plans to spend about US$40 billion across both states, including an additional two factories in Sherman, Texas. It is likely that those would come online after 2030, and the Department of Commerce has said it would prioritize projects that would be done by the end of the decade.
Photo: REUTERS
Texas Instruments makes a wide variety of chips and has the biggest customer base in the semiconductor industry. In addition to getting grants and loans, it expects to benefit from 25 percent tax credits from the 2022 CHIPS and Science Act. That could amount to US$6 billion to US$8 billion, the company said in a statement.
The CHIPS Act is the US’ most ambitious foray into industrial policy in more than a generation. It set aside US$39 billion in direct grants — plus tax credits, loans and loan guarantees worth US$75 billion — to persuade companies to make more semiconductors on US soil after decades of production shifting to Asia. Officials have now allocated the lion’s share of the funding via more than a dozen preliminary awards. They expect to wrap up announcements by the end of this year.
Most of the money is slated to support production of cutting-edge chips by companies such as Intel Corp and Taiwan Semiconductor Manufacturing Co (台積電). However, the law set aside a minimum of US$2 billion for less advanced semiconductors — sometimes called legacy chips — such as those produced by Texas Instruments. With yesterday’s announcement, the agency has cleared that threshold. The other major legacy chip award is a US$1.5 billion grant to GlobalFoundries Inc.
Legacy chips are essential to the global economy, powering everything from smartphones to refrigerators to weapons systems. It is also an area where China is increasing its ambitions. The US and the EU have become alarmed by Beijing pouring billions into factories making these processors, and Biden announced in May that he would double tariffs on the Chinese components to 50 percent.
The award for Texas Instruments would help ensure “a secure domestic supply of the foundational semiconductors that are the building blocks for nearly every aspect of modern life,” Undersecretary of Commerce for Standards and Technology Laurie Locascio said.
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