By Deborah Mary Sophia
(Reuters) -Texas Instruments said on Friday it would receive up to $1.6 billion in funding from the U.S. Commerce Department towards the construction of three new facilities, the latest government outlay aimed at bolstering domestic chip production.
The funding, under the U.S. CHIPS and Science Act, will help the company build two factories in Texas and one in Utah. Texas Instruments (NASDAQ:TXN) has pledged more than $18 billion through 2029 to the projects, which are expected to create 2,000 manufacturing jobs.
The chipmaker also expects to receive about $6 billion to $8 billion in investment tax credit from the U.S. Treasury Department, and $10 million in funding for workforce development.
"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," CEO Haviv Ilan said.
The United States is trying to boost domestic output and reduce reliance on semiconductor hub Taiwan through the CHIPS Act, which was passed in 2022 and can provide $52.7 billion in subsidies for chip production and research.
It awarded nearly $20 billion in grants and loans to Intel (NASDAQ:INTC), and $6.1 billion in grants to memory chipmaker Micron Technology (NASDAQ:MU) earlier this year.
"This $1.6B will go a long way in helping Texas Instruments stay competitive," said Kinngai Chan, senior analyst at Summit Insights Group.
"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," Chan said, noting China was also spending on mature nodes, which represent about half the global chip demand.
Texas Instruments is benefiting from a rebound in demand for its chips, used in everything from smartphones to cars. It topped quarterly earnings estimates last month.