Texas Instruments is building a $60 billion U.S. manufacturing megaproject where Apple vows to make "critical foundation semiconductors" for iPhones and other devices. CNBC went to Sherman, Texas, for an exclusive first look inside the newest fab of seven TI's building in Utah and Texas to provide U.S.-made chips to customers like Nvidia and Ford. TI shares have suffered amid tariff concerns, and it's lost analog market share for several years, but top leaders are confident about the huge spend.
First Look At Texas Instruments’ $60 billion Megaproject For U.S.-Made Chips
- Thread starter soAsian
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hist78
Well-known member
Mohammad Yunus, Senior VP, Technology and Manufacturing, TI (Texas Instruments):
We would have more than 5X of the capacity that we have today when all of these fabs build out.
Katie Tarasov, CNBC Reporter:
5X is a lot. Do you think the market is going to need all that?
Mohammad Yunus, TI:
Yes, when you think about the semiconductor content growth it continues to grow.
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How much of that is driven by an IDM's confidence, and how much by real market demand?
Hopefully TI is taking TSMC's strategy of building fabs for customers rather than building fabs in hopes of customers. Mabey the USG will take a stake in TI as well?
hist78
Well-known member
I hope the US government doesn’t become a shareholder in TI. If it does, that would be a clear sign that TI is in serious trouble.
Michael Domnitei
Member
I am not sure if it is a good idea to put "all the eggs in one basket" because it is too risky (meaning building fabs to serve only one customer).
hist78
Well-known member
This is especially true for advanced logic IDMs seeking external foundry customers. If their captive, internal customers fail to perform, the foundries will suffer significantly. Can they simply attract more external customers to offset the risk? So far, neither Samsung nor Intel has been able to do so successfully for a variety of reasons.
On the pure-play foundry side, their customers are more diversified. From 2024 TSMC Annual Report:
"In 2024, the Company manufactured 11,878 different products using 288 distinct technologies for 522 different customers."
TI has been strategically brilliant in their fab construction in the past. They built one fab, as the video notes, with Qimonda equipment after the GFC.
I think TI is building fab shells, not complete fabs. Why not, the USG is paying for it via the Chips act. Note the emptiest looking fab ballroom in the video.
If there is another pandemic like chip shortage, TI will be able to do something. Maybe ramp up in 1.5 years. When you have the fab building, the facilities, all you need to do is bring the equipment in and that can be done in 9 months or so. That seems like a reasonable strategy to me.
I think TI is building fab shells, not complete fabs. Why not, the USG is paying for it via the Chips act. Note the emptiest looking fab ballroom in the video.
If there is another pandemic like chip shortage, TI will be able to do something. Maybe ramp up in 1.5 years. When you have the fab building, the facilities, all you need to do is bring the equipment in and that can be done in 9 months or so. That seems like a reasonable strategy to me.