Texas Instruments is deepening its bet on domestic production of semiconductors by breaking ground this week on what will become an $11 billion fabrication plant in Utah.
The Dallas-based chipmaker is starting work on a new 300-millimeter semiconductor plant in Lehi, where it already operates an existing plant that it bought from Micron Technology for $900 million in 2021.
Even though chip demand has slumped this year, the company is banking on long-term reliance on electronics to power everything from cars and trucks to machinery used in manufacturing plants across the globe.
Texas Instruments announced its plan to build the second Utah plant earlier this year. Production is planned as early as 2026, with the plants capable of making tens of millions of analog and embedded processing chips daily.
Those chips are “vital for nearly every type of electronic system today,” TI president and CEO Haviv Ilan said in a statement. “This new fab is part of our long-term, 300-mm manufacturing roadmap to build the capacity our customers will need for decades to come.”
TI’s wafer fabrication plants produce semiconductors in a sterile environment, where a 400-step process takes place to turn 300-millimeter wafers into some of the world’s most essential technology.
Besides the existing Lehi fab, the company also operates domestic chipmaking plants in Dallas and Richardson and is investing up to $30 billion in a four-fab facility under construction in Sherman. It completed a $6 billion expansion of the Richardson facility in 2022.
Utah leaders describe TI’s $11 billion investment as the largest in state history. The new plant will create about 800 permanent jobs and thousands of other positions during construction.
“TI’s growing manufacturing presence in Utah will be transformative for our state, creating hundreds of good-paying jobs for Utahns to manufacture critically important technology,” said Utah Gov. Spencer Cox in a statement.
TI also committed $9 million to a Utah school district to develop the state’s first science, technology, engineering and math learning community for kindergarten through 12th grade. The multiyear effort is aimed at rooting STEM concepts more deeply in the 85,000-student district’s coursework.
The outlook
Texas Instruments is the biggest maker of analog semiconductors, producing billions of analog and embedded processing chips annually for some 80,000 products. The chips do everything from detecting temperature changes and registering button presses to controlling motors across a range of devices – from rockets to appliances.
Because of the breadth of TI’s portfolio, its performance is closely watched on Wall Street as a bellwether for demand across the economy.
The company’s most recent quarterly results included a revenue forecast for the final three months of this year that hinted demand would remain sluggish.
Revenue in the fourth quarter is projected to come in between $3.93 billion and $4.27 billion, the company said on Oct. 24. Analysts expected around $4.49 billion.
Chip investors have been waiting for signs that electronics makers have worked their way through a pileup of inventory and are ready to increase orders again. TI contends its products have a shelf life of up to a decade. That means accumulated inventory is less of a problem than for other chipmakers, and it may even help the company respond more rapidly when demand returns.
TI has budgeted $5 billion a year for new plants and equipment through 2026. “You should count on that,” Chief Financial Officer Rafael Lizardi told analysts last month.
“We’re very pleased with the progress on our manufacturing expansion that will provide geopolitically dependable capacity to support customer growth for the coming decade,” he said.
TI’s investment decision-making included receiving funding through the CHIPS Act, a Biden administration program to pump nearly $53 billion in federal funding to boost the domestic chip industry. Lizardi said the company is working through the government’s grant application process.
“We firmly believe we are very well-positioned to receive those funds,” he said. “We believe that will be meaningful to our manufacturing operations in Texas and Utah.”
Information from Bloomberg also was used in this story.
