Chipmaker Texas Instruments Inc. today announced that it has secured $4.6 billion in federal financing to upgrade its manufacturing infrastructure.

The new funds will enable the company to build three new semiconductor plants, or fabs, in Texas and Utah. Construction on the facilities has already begun. Chip production is expected to start as soon as next year.

Nasdaq-listed Texas Instruments is a major provider of embedded processors. Those are low-power chips that are used to equip systems such as smart home appliances, cars and industrial machines with a limited amount of onboard computing capacity. A robotic arm at an auto plant, for example, might use an embedded processor to translate work instructions into motion.

Texas Instruments also sells analog chips. Such circuits are used not for processing tasks, but rather to measure or manage physical phenomena. Applications for analog chips range from measuring the temperature to managing the flow of electricity inside batteries to prevent voltage surges.

Analog chips and standard processors differ significantly in their architecture. A processor carries out computations using so-called discrete electric signals, which each represent either a one or a zero. Analog chips work with more complex electric signals that lend themselves better to representing data about heat, illumination and other physical properties.

Texas Instruments makes embedded processors and analog chips using a network of 15 manufacturing sites. The CHIPS Act financing that the company secured today will enable it to build three more plants.

The first two fabs are being constructed in the city of Sherman, Texas, which is about an hour-and-a-half drive from Texas Instruments’ Dallas headquarters. The facilities are part of a manufacturing complex that is eventually expected to host as many as four chip plants. Once it reaches full capacity, the campus is planned to produce more than 100 million chips per day.

Texas Instruments’ third new fab is being built in Lehi, Utah immediately next to one of its existing plants. Together, the two facilities will make tens of millions of analog chips and embedded processors per day once production is in full swing.

Texas Instruments will use its new CHIPS Act financing to build cleanrooms for one of the new Sherman fabs and the Lehi facility. The cleanroom is the section of a chip plant that houses its semiconductor production equipment. The remaining funds will be used to build the second Sherman fab’s shell, or external structure. The company expects its Sherman manufacturing complex to start making chips as early next year, while the Lehi fab is scheduled to follow suit in 2026.

The new facilities are part of a long-term investment plan that will see Texas Instruments spend more than $30 billion to upgrade its manufacturing infrastructure in Texas and Utah. The $4.6B in CHIPS Act financing that the company has won to support the project includes $3 billion worth of loans and $1.6 billion in direct funding from the Commerce Department. Additionally, it will receive tax credits with an expected value of up to $8 billion.

Texas Instruments joins the growing list of semiconductor companies that have received funding through the CHIPS Act in recent months. Intel Corp., Taiwan Semiconductor Manufacturing Co. Ltd. and Samsung Electronics Co. Ltd. have collectively won more than $25 billion worth of federal financing to date. GlobalFoundries Inc., which makes chips using less advanced manufacturing technologies, also received $1.5 billion in CHIPS Act funding earlier this year. 

Image: Texas Instruments