The government is bent on boosting domestic chip production, and Texas Instruments is among the companies that will benefit from this goal.
On Friday, the company announced that it is slated to receive funding from the U.S. Commerce Department to the tune of $1.6 billion. The funds will be used to build three new facilities.
The funding came from the U.S. CHIPS and Science Act, and it will help the company to strengthen the local chip manufacturing industry. The money will be used to help TXN in building two factories. One of these will be located in Texas, and the other one will be in Utah.
According to the under secretary of commerce for standards and technology, Laurie E. Locascio, the investment will "advance U.S. economic security and mitigate those same supply chain vulnerabilities that were brought to light during the pandemic," New York Times reported.
The company has already pledged $18 billion for the projects up to 2029. More than 2,000 manufacturing jobs are expected to be created out of it.
Aside from the funding that will be allocated for the construction of facilities, there are other funding sources that the company is set to receive. TI is slated to receive around $10 million for workforce development, according to a Reuters report.
To give the company an added boost, it will also receive a whopping investment tax credit from the Treasury Department, amounting to approximately $6 to $8 billion. The total funding that TI will be receiving may be a good way to jumpstart the already sluggish domestic chip manufacturing industry. 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," said Haviv Ilan, the CEO of TI.
Through the CHIPS Act, which was passed in 2022, the U.S. may slowly free itself from relying on Taiwan, touted as the current semiconductor hub, for its chips. The funding that it is throwing towards domestic manufacturing companies can be a good way to fire up its goal of boosting domestic output. With an allocated $52.7 billion worth of subsidies for production and research on chips, domestic companies like TI can be given a good head start.
The funding for TI was not the first one derived from the CHIPS Act. Earlier this year, Intel and Micron Technology have also received corresponding subsidies. Intel was awarded with almost $20 billion in loans and grants, while Micron also received $6.1 billion.
Kinggai Chan, a senior analyst at Summit Insights Group, said that the $1.6 billion funding that TI will be receiving will certainly go a long way in helping the company stay competitive.
"While TI doesn't play in the cutting-edge process node, mature-node (a less advanced technology) is still very important for the US semiconductor industry," he further added.
