U.S. Awards $1.6 Billion to Texas
Instruments to Build Semiconductor Plants
The funding stems from
the bipartisan CHIPS Act, which aims to bolster the production of
critical semiconductors in the United States. .
|
Ramping up domestic chip manufacturing has been a major goal for
President Biden, whose economic policy agenda largely focuses on
boosting American manufacturing and bringing back jobs that have
moved overseas in recent decades. Eric Lee/The New York Times |
Aug. 16, 2024
The Biden administration will award up to $1.6 billion in grants to
Texas Instruments to help the company build three new manufacturing
plants, the latest in a slew of awards intended to ramp up the
nation’s production of semiconductors.
The funds will help the Dallas-based company construct two plants in
Sherman, Texas, and a facility in Lehi, Utah, Commerce Department
officials announced on Friday. The grant is meant to strengthen the
domestic supply of semiconductors, the tiny chips that are key
components of electronic devices.
The investment will “advance U.S. economic security and mitigate those
same supply chain vulnerabilities that were brought to light during
the pandemic,” said Laurie E. Locascio, the under secretary of
commerce for standards and technology, during a call with reporters on
Thursday night.
In addition to the grant, the department will award up to $3 billion
in loans to Texas Instruments, officials said. The company is also
expected to claim federal tax credits that could cover 25 percent of
the cost of building and outfitting factories with production
equipment. The funds will support the company’s investment of more
than $18 billion to construct the new facilities, officials said.
the funding comes from the CHIPS Act, which passed Congress with
bipartisan support in 2022. The legislation was intended to bolster
the domestic production of semiconductors and reduce the nation’s
dependence on Asian countries for them. Only about 10 percent of the
world’s semiconductors are manufactured in the United States, down
from about 37 percent in 1990.
Ramping up domestic chip manufacturing has been a major goal for
President Biden, whose economic policy agenda focuses in part on
boosting American manufacturing and bringing back jobs that have moved
overseas in recent decades.
The legislation also came in response to
the expensive and economically damaging chip
shortages that occurred during
the pandemic. Officials said the Texas Instruments award would support
the company’s production of current-generation and mature, or less
advanced, semiconductors that were in short supply during the
pandemic.
The law gave the Commerce Department $39
billion to dole out as grants to encourage chipmakers to build and
expand new facilities in the United States. So far, the Biden
administration has announced more than $30 billion in grants through
the program. Several companies that manufacture more advanced
semiconductors have received multibillion dollar awards in recent
months, including Intel, Taiwan
Semiconductor Manufacturing Company and Samsung.
Texas Instruments broke
ground on its new plants in
Sherman in May 2022, and on
its Lehi plant in November
2023.
Together, the new plants are expected to
create more than 2,000 manufacturing jobs, federal officials said.
The first
facility in Sherman is expected
to begin production as early as 2025, and the plant
in Lehi is expected to start
production as early as 2026.
The Semiconductor Industry Association, a
trade group, has
estimated that the new
investments will help the United States triple its domestic chip
manufacturing capacity by 2032, increasing the nation’s share of
global chip manufacturing to 14 percent.
The federal effort has helped catalyze nearly $400 billion in private
investments from semiconductor and electronics companies,
administration officials said.
Still, longer-term questions about the
viability of some companies remain. Intel said this
month that it would cut more than 15,000 jobs, or about 15 percent of
its work force. Company officials have said they remained committed to
expanding its semiconductor facilities in America.
Madeleine Ngo covers
U.S. economic policy and how it affects people across the country. More
about Madeleine Ngo
A version of this article appears in print on Aug.
17, 2024,
Section B, Page 4 of the New York edition with the headline: U.S. to
Award $1.6 Billion to Texas Instruments for Semiconductor Plants.
© 2024 The
New York Times Company
