Dive Brief:
- Texas Instruments plans to spend more than $60 billion to increase chip production domestically, according to a Wednesday announcement. The initiative represents the “largest investment in foundational semiconductor manufacturing in U.S. history,” the company said.
- The nearly century-old technology provider will build seven semiconductor fabrication facilities across three manufacturing “mega-sites” located in Texas and Utah. The plants will produce analog and embedded processing chips for Apple, Ford, Medtronic, Nvidia and SpaceX as part of the initiative, the company said.
- Texas Instruments was awarded $1.6 billion in CHIPS and Science Act funding last year. Despite President Donald Trump’s efforts to undo the Biden-era legislation, his administration lent its support to the Texas Instruments initiative. “President Trump has made it a priority to increase semiconductor manufacturing in America — including these foundational semiconductors that go into the electronics that people use every day,” U.S. Secretary of Commerce Howard Lutnick said in the Wednesday announcement.
Dive Insight:
Texas Instruments’ buildout plan comes amid compute consumption spikes spurred by AI adoption and concurrent enterprise modernization efforts.
Hyperscaler infrastructure investments drove an 18% year-over-year increase in semiconductor revenue globally last year, according to Gartner. The analyst firm anticipates the massive market to climb at least another 11% this year to over $700 billion.
The three largest cloud providers — AWS, Microsoft and Google Cloud — reported compute capacity constraints as enterprises ramped up AI projects last year, triggering a wave of multi-billion-dollar hyperscale data center investments. Oracle, a junior member of the hyperscale club, saw capital expenditures more than double to over $20 billion during its fiscal year, which ended May 31.
Texas Instruments’ manufacturing push has geopolitical dimensions, as well. President Trump made a domestic manufacturing rebuild central to his administration’s policy objectives, and the technology sector has responded.
In April, amid confusion and uncertainty triggered by Trump administration tariffs, IBM announced plans to invest $150 billion over the next five years in domestic research, development and manufacturing.
Nvidia — one of the biggest beneficiaries of the data center building boom — pledged $500 billion to bolstering domestic chip manufacturing in April. The GPU giant has seen quarterly revenues skyrocket to more than $40 billion, up from under $6 billion two-and-a-half years ago.
Texas Instruments hasn’t been as fortunate. The company reported $4.1 billion in revenue during the first three months of the year, up 11% compared to Q1 2024.
With the Trump administration threatening levies on semiconductor imports, Texas Instruments President and CEO Haviv Ilan indicated the company would shift manufacturing from foundries in Taiwan to a plant in Lehi, Utah, during a recent earnings call.
Texas Instruments is ramping up production this year in Utah and Texas facilities as it continues to build capacity. The timeline for the $60 billion investment will be based on business demand, a spokesperson told CIO Dive.
