Texas Instruments $60bn Bet Pays Off

Texas Instruments (TI), a global leader in semiconductor manufacturing, is making headlines with its ambitious plan to invest over $60 billion in expanding its U.S. manufacturing operations. This marks one of the largest domestic semiconductor expansions in recent history, and aligns strongly with President Donald Trump's strategy of bringing manufacturing jobs back to the United States.

Mega-Site Centrepiece in Sherman

At the heart of TI’s investment is a $40 billion mega-site in Sherman, Texas. This vast complex, already progressing rapidly, will eventually host four state-of-the-art 300mm wafer fabrication plants. These plants, known as SM1, SM2, SM3, and SM4, are designed to churn out hundreds of millions of analog and embedded processing chips daily, essential for numerous industries including automotive, consumer electronics, healthcare, and artificial intelligence.

Construction milestones have been impressive. SM1 is slated to begin production in 2025, just three years after construction began, while SM2’s exterior is already complete. Early planning for SM3 and SM4 is underway, demonstrating TI’s confidence in sustained demand growth.

Government Backing and Strategic Impact

The U.S. government’s significant backing through the CHIPS and Science Act underlines the strategic importance of TI’s expansion. The Department of Commerce has awarded TI up to $1.6 billion to assist with the construction of three fabrication plants, two in Sherman and another in Lehi, Utah.

In addition to direct funding, TI expects further support from the Treasury Department’s Investment Tax Credit scheme, potentially adding $6-8 billion, with an extra $10 million dedicated to workforce development. This blend of public and private investment showcases a robust commitment to reshaping the domestic semiconductor industry and strengthening national security by reducing dependence on foreign supply chains.

Why the Investment Matters

TI’s move addresses critical vulnerabilities revealed during global chip shortages, especially those exacerbated by the COVID-19 pandemic. By aiming to meet more than 95% of its manufacturing needs internally by 2030, TI significantly reduces the risks associated with international disruptions.

Moreover, TI’s strategic initiative supports America's broader economic and industrial policies. Since the introduction of the CHIPS Act, more than 80 semiconductor projects have been announced across the U.S., with total domestic production capacity set to triple by 2032. This initiative clearly positions the U.S. as a formidable global competitor in chip manufacturing once again.

Financial Strength and Market Position

TI’s robust financial position is central to this strategic investment. With a market capitalisation around $177 billion as of June 2025, the company ranks among the top global firms. Despite a recent dip in its share price from its November 2024 peak, TI has maintained strong revenue growth, including an 11% year-over-year increase in Q1 2025. Its strategic focus on analog semiconductors, where revenue surged by 13%, highlights the company’s clear competitive advantage.

The firm's commitment to shareholder value remains evident through substantial dividends and share buybacks, totalling $6.4 billion over the past year. Such financial strength underpins TI’s ambitious expansion, reassuring investors and stakeholders alike.

Strategic Partnerships and Future-Proofing

Central to TI’s expansion strategy are deep-rooted partnerships with major technology companies such as Apple, Ford, Medtronic, NVIDIA, and SpaceX. These relationships secure long-term, stable demand for TI’s chips, embedding the company deeply within critical supply chains across diverse sectors from electric vehicles and medical devices to aerospace and AI.

Investing in advanced 300mm wafer production also allows TI to benefit from substantial economies of scale and reduced manufacturing costs. This approach ensures that TI remains globally competitive, particularly against rivals reliant on older 200mm technologies, and positions it favourably for future technological advancements.

What's next?

Looking ahead, Texas Instruments’ expansive strategy is likely to influence the semiconductor industry's future direction significantly. Competitors may ramp up their investments, encouraged by TI’s confident market positioning and government support.

For policymakers and industry stakeholders, TI’s expansion underscores the critical role of public-private collaboration in revitalising domestic manufacturing capabilities. Continued government incentives and strategic partnerships will remain pivotal as the U.S. strives for technological independence and resilience in the global semiconductor supply chain.

As TI’s mega-sites progress from planning to production, the company's gamble could set a benchmark for reshoring critical technology industries, shaping not only the semiconductor market but potentially redefining America’s manufacturing landscape for decades to come.