Texas Instruments to get up to $1.6B from US to help build 3 chip facilities

Texas Instruments (NASDAQ:TXN) said it signed a tentative agreement with the U.S. Department of Commerce to receive up to $1.6B in proposed direct funding to support three 300mm wafer fabs under construction in Texas and Utah.

The company noted that the non-binding preliminary memorandum signed was for receiving funding under the U.S. CHIPS and Science Act.

Texas Instruments expects to receive an estimated $6B to $8 from the U.S. Department of Treasury’s Investment Tax Credit for qualified U.S. manufacturing investments.

“With plans to grow our internal manufacturing to more than 95% by 2030, we’re building geopolitically dependable, 300mm capacity at scale to provide the analog and embedded processing chips our customers will need for years to come,” said Texas Instruments’ President and CEO Haviv Ilan.

Texas Instruments noted that the funding will help its investment of more than $18B through 2029, which is part of its broader investment in manufacturing.

The funding will support three new wafer fabs, two in Sherman, Texas, (SM1 and SM2) and one in Lehi, Utah (LFAB2), according to the company.

Texas Instruments added that it also expects to receive $10M in proposed funding for workforce development, as it will create over 2,000 new jobs in the company across its three new fabs, and thousands of indirect jobs for construction, suppliers and supporting industries.

In addition, the company said that its 300mm wafer fabs will be entirely powered by renewable electricity.

The CHIPS Act funding aims to increase U.S. semiconductor manufacturing and research, especially in advanced semiconductors. Several companies including, Intel (INTC), SK hynix, Samsung (OTCPK:SSNLF), Taiwan Semiconductor Manufacturing (TSM), and Micron Technology (MU) are getting funds under the act.

TXN +1.61 to $205.19 premarket Aug. 16