Biden-Harris Administration reveals preliminary terms with TI
U.S. Department of Commerce outlines $1.6 billion in funding to support multiple projects in Texas and Utah.
The Biden-Harris Administration announced that the U.S. Department of Commerce and Texas Instruments (TI) have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $1.6 billion in proposed direct funding under the CHIPS and Science Act to strengthen domestic supply chain resilience, advance our national security, and bolster U.S. competitiveness in current-generation and mature-node semiconductor production. President Biden and Vice President Harris championed the CHIPS and Science Act, a key component of the Investing in America agenda, to usher in a new era of semiconductor manufacturing in the United States, bringing with it a revitalized domestic supply chain, good-paying jobs, and investments in the industries of the future. The proposed funding would support TI’s investment of more than $18 billion through the end of decade to construct three new state-of-the-art facilities, including two in Texas and one in Utah, and is estimated to create over 2,000 manufacturing jobs and thousands of construction jobs over time.
Headquartered in Dallas, TI is a global leading manufacturer of analog and embedded processing semiconductors. The company has played an important role in the U.S. economy for almost a century, with the invention of the integrated circuit, creating the technological foundation for the modern electronics and semiconductor industries. Today, TI specializes in the production of current-generation and mature-node chips, also referred to as “foundational” chips, which are the building blocks for nearly all electronic systems, including power management integrated circuits, microcontrollers, amplifiers, sensors, and more. TI’s planned projects would meaningfully support the increasing needs for economic and national security applications – areas that TI has supported for decades.
“During the pandemic, shortages of current-generation and mature-node chips fueled inflation and made our country less safe. With this proposed investment from the Biden-Harris Administration in TI, a global leader of production for current-generation and mature-node chips, we would help secure the supply chain for these foundational semiconductors that are used in every sector of the U.S. economy, and create thousands of jobs in Texas and Utah,” said U.S. Secretary of Commerce Gina Raimondo. “The CHIPS for America program will supercharge American technology and innovation and make our country more secure – and TI is expected to be an important part of the success of the Biden-Harris Administration’s work to revitalize semiconductor manufacturing and development in the U.S.”
“Americans across the country felt the impact of semiconductor shortages during the pandemic—from car and appliance scarcities, to manufacturing lines halted and jobs lost. With the CHIPS and Science Act, President Biden and Vice President Harris took action to strengthen our supply chains, create good-paying jobs, and advance U.S. competitiveness,” said Assistant to the President for Science and Technology and Director of the White House Office of Science and Technology Policy Arati Prabhakar. “Texas Instruments is a global leader in foundational chip manufacturing, and thanks to the leadership of President Biden and Vice President Harris, TI is investing in our future here at home.”
Shortages of current-generation and mature-node chips were one of the driving factors of supply chain disruptions during the COVID-19 pandemic, causing acute impacts on the U.S. automotive, industrial, and defense industries, and on the availability of goods for Americans. TI’s more than $18 billion planned investment through the end of the decade across these three facilities would significantly increase its domestic production capacity of foundational chips, bolstering resilience against major economic disruptions. As one of the only companies building high-volume 300-mm wafer capacity for foundational technologies in the United States, this proposed CHIPS investment would help support CHIPS for America’s Vision for Success by substantially increasing domestic manufacturing capabilities for mature-node chips.
“The historic CHIPS Act is enabling more semiconductor manufacturing capacity in the U.S., making the semiconductor ecosystem stronger and more resilient,” said Haviv Ilan, president and CEO of Texas Instruments. “Our investments further strengthen our competitive advantage in manufacturing and technology as we expand our 300mm manufacturing operations in the U.S. 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.”
The proposed CHIPS funding would be split across three projects in two locations:
• Sherman, Texas: Construction of two new, large-scale 300-mm fabrication facilities that are expected to produce 65nm – 130nm essential chips, with anticipated production capacity of more than one hundred million chips every day. The Sherman site is one of the only greenfield production sites for chips on 300-mm wafers in the U.S.
• Lehi, Utah: Construction of a new, large-scale 300-mm fabrication facility to produce 28nm – 65nm analog and embedded processing chips, which is anticipated to produce tens of millions of chips every day. This project represents the largest economic investment in Utah’s history.
TI will continue to further its strategic approach of building closer direct customer relationships and maintaining inventory for high levels of customer service, both of which would help advance U.S. economic security.
“One of the four main pillars Secretary Raimondo laid out for successful implementation of the CHIPS and Science Act is the United States increasing its production capacity for current-generation and mature-node chips most vital to U.S. economic and national security,” said Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology Director Laurie E. Locascio. “With our proposed investment in the world’s global leader of current-generation and mature-node chips, we would significantly advance our economic and national security and mitigate supply chain vulnerabilities, which were the driving factors of the CHIPS and Science Act.”
The proposed investment is estimated to create over 2,000 manufacturing jobs and thousands of construction jobs over time. Additionally, the PMT includes $10 million in proposed dedicated workforce funding to support the development of the company’s semiconductor and construction workforce. TI is committed to building a future-ready workforce, and invests in enhancing the skills of current employees, expanding internships and creating pipeline programs with a focus on building electronic and mechanical skills. TI has robust engagements with 40 community colleges, high schools, and military institutions across the U.S. to develop future semiconductor talent. TI provides their employees with a range of child care benefits that include Flexible Spending Accounts, paid parental leave, and services to match employee families with commercial child care centers according to their preferences. The company also plans to partner with additional providers to increase availability of child care services near their facilities.
The company has indicated that it plans to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures. In addition to the proposed direct funding of up to $1.6 billion, the CHIPS Program Office would make approximately $3 billion in proposed loans – which is part of the $75 billion in loan authority provided by the CHIPS and Science Act – available to TI under the PMT.
As explained in its first Notice of Funding Opportunity, the Department may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The PMT outlines key terms for a potential CHIPS incentives award, including the amount and form of the award. The award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones. After the PMT is signed, the Department begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant. The terms contained in any final award documents may differ from the terms of the PMT being announced today.
