Texas Instruments
Ti Lehi Utah Second Fab Promo

Construction Boom Continues: TI to Invest $11B in Next 300-mm Fab

Feb. 17, 2023
The building of a new 300-mm semiconductor fab in Utah is the latest step in the company’s aggressive expansion plans.

Texas Instruments (TI) said it would invest $11 billion to build its next 300-mm wafer fabrication plant in Lehi, Utah, as it looks to stay a step of robust demand for chips in areas such as industrial and automotive.

The goal, according to TI, is to manufacture “tens of millions” of analog and embedded-processing chips per day at the site outside Salt Lake City, Utah. It will be located right next to the company’s existing 300-mm fab, which began mass production just last year.

Construction of the new facility is expected to start in the second half of 2023, with production slated for as early as 2026. Once construction ends, the two facilities at the site will “operate as a single fab,” said TI.

TI, the world’s largest analog semiconductor maker, noted that the facility will complement its existing 300-mm fabs, including DMOS6 in Dallas, Texas; RFAB1 and RFAB2 in Richardson, Texas; and the LFAB in Lehi, Utah.

"This new fab is part of our long-term, 300-mm manufacturing roadmap to build the capacity our customers will need for decades to come," said Haviv Ilan, TI’s incoming president and chief executive, who will replace Rich Templeton in April. 

Expanding Its 300-mm Capabilities

This is TI’s second major investment to expand its 300-mm manufacturing footprint in recent years. It has also started building what will likely be one of the country’s largest chip manufacturing fabs, with production set to ramp up at the Sherman, Texas site as early as 2025. Potential investment at the site, which can accommodate up to four 300-mm fabs, could climb up to $30 billion over time, said TI.

Ilan said it makes sense to invest in the new facility given the company’s growth prospects in the industrial and automotive markets, which have been pinched by the most acute production shortages for years now.

Moreover, industry officials expect the global chip industry to top $1 trillion in annual sales by 2023. Global chip sales rose by 3% to a record $573.5 billion last year despite a second-half slowdown.

The project will add to the company’s efforts to expand its chip-making capacity and help cement its leadership in the analog, power, embedded, and other chips vital to virtually every electronic device. The global chip crunch underscored the central role that TI plays in the electronics industry at large. TI sells approximately 90,000 SKUs to more than 100,000 customers around the globe, the longest list of buyers in the business.

TI and other major chip companies from Intel to Micron to TSMC have been racing to raise production capacity in recent years as a surge in demand that started during the pandemic changed how the world sees the chip sector.

These companies are reacting, in part, to widespread chip shortages that started during the pandemic and has impacted virtually every company that buys electronic components—from Apple to Ford—at some point over the last three years.

Reclaiming Chip Superiority

To reduce the risk of disruptions of the sort caused by the global chip crunch, the U.S. has been pushing to help restore the nation’s leadership in semiconductor manufacturing in terms of quality and quantity.

Earlier this month, President Biden in his State of the Union address praised the passage of the CHIPS and Science Act in mid-2022, which will dole out $52 billion in subsidies and other incentives to spur U.S. fab construction.

Since the law was proposed in mid-2020, companies have announced more than 40 new projects to build out the semiconductor ecosystem in the U.S., ranging from the construction of new fabs and expansions of existing sites to new facilities that supply raw materials and fab equipment. The projects are backed by more than $200 billion in private investment spread out over 16 states, according to the SIA, a trade group.

“There is no better time to further invest in our internal manufacturing capacity,” said Ilan in a statement. Executives at TI have said previously that the company plans to apply for direct government grants under the CHIPS Act.

But challenges loom in the short term. TI and others in the semiconductor industry have been struggling to adjust to a slump in demand that has spread to virtually all parts of the business in recent months—the exception being the automotive market.

All-Around Benefits of the Lehi Site

The Lehi location is considered ideal because of its access to skilled talent, robust existing infrastructure, and strong network of suppliers and other partners. These factors are largely due to TI’s existing presence in the region plus Intel’s and Micron’s investments in the site—previously home to IM Flash Technologies—prior to TI’s purchase in 2021. The Lehi expansion marks the largest economic investment in Utah history, according to the company.

The new facility is expected to create approximately 800 permanent jobs within TI. The expansion also is expected to result in thousands of additional jobs in construction and other occupations.

TI also emphasized sustainability as a key element of the new facility. Manufacturing chips today requires massive amounts of water, and plans for the new plant include recycling water at almost double the rate of the existing Lehi fab.

TI said the use of 300-mm wafers will reduce the amount of water and energy required per chip compared to the 200-mm fabs that are more typical in the markets it competes in. On top of that, the larger wafers mean the manufacturing process creates less waste per chip.

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