When Texas Instruments introduced a $60 billion manufacturing megaproject in July, it was a daring wager that corporations would need to mass produce foundational microchips on U.S. soil. In August, Apple vowed to just do that.
During the identical Oval Office press convention the place President Donald Trump announced a 100% tariff on chips from corporations not manufacturing within the U.S., Apple CEO Tim Cook upped his corporations’ U.S. spending commitment to $600 billion over the subsequent 4 years, up from an authentic $500 billion announcement in February.
Part of that spending, Cook stated, will go towards making “critical foundation semiconductors” for iPhones and different units at Texas Instruments’ new chip fabrication crops in Utah and Texas.
In July, CNBC grew to become the primary information group to see the within of TI’s latest fab in Sherman, Texas. There, full manufacturing is on schedule to start out by the tip of 2025. It’s one among seven new factories the chipmaker is constructing within the U.S. to supply chips to main clients like Nvidia, Ford Motor, Medtronic and SpaceX.
Although Texas Instruments does not make the world’s most superior chips, its important parts are discovered nearly in all places, from smartphones to the graphics processing models powering generative AI.
“If you have anything that plugs into the wall, or has a battery in it, or has a cord in it, you probably carry more than one TI chip in it,” stated Mohammad Yunus, TI’s senior VP of know-how and manufacturing.
But only one month after TI introduced the $60 billion project, its shares plummeted 13% following weak guidance and tariff concerns raised in its July 23 earnings name.
“The worry is their end customers. Like in the wake of tariff uncertainty, they don’t know what to expect. Are they stockpiling?” stated Stacy Rasgon, senior analyst at Bernstein Research.
It stays to be seen whether or not demand will stay excessive as soon as tariff uncertainties calm. Still, shares did recuperate some floor in August.
“I would position them as more of a tariff winner than a tariff loser,” stated Timothy Arcuri, managing director at UBS. Arcuri stated TI’s U.S. foundry will permit it to undercut the pricing of its rivals’ Taiwan-made chips.
The marketplace for TI’s chips, nonetheless, is just not a assure. After TI had bother maintaining with demand in the course of the chip scarcity in 2020, Arcuri stated TI’s share of the analog market “fell off a cliff.” It went from a excessive of 19.8% in 2020 to a low of 14.7% in 2024, based on UBS.
TI’s $60 billion megaproject consists of 4 fabs in Sherman, Texas, one in Richardson, Texas, and two in Lehi, Utah. The new fabs will give TI 5 instances the capability it has right this moment, Yunus informed CNBC.
“They’re making a big bet on the fact that they regain share and that demand comes rocketing back,” Arcuri stated. “If you don’t regain that share, it’s hard to justify building this much capacity.”
SM1 and SM2, the primary two of 4 new chip fabrication crops being constructed by Texas Instruments in Sherman, Texas, proven on July 24, 2025.
Graham Merwin
Ramping to 300mm
While TI is well-known for its graphing calculators, the corporate can be accountable for serving to revolutionize the electronics trade. In 1958, TI engineer Jack Kilby filed the primary patent for an built-in circuit. That paved the best way for miniaturizing chips by constructing all of the parts of a circuit, not simply the transistors, instantly right into a single piece of silicon.
The majority of TI’s enterprise right this moment comes from automotive and industrial clients that purchase the corporate’s analog and embedded chips. Analog chips course of alerts like sound, mild and stress, just like the temperature on a thermostat or voltage on energy administration chips that hold electronics protected when plugged in. Embedded chips are usually sign processors and microcontrollers for working on a regular basis units, like telling the toaster to ding, the dishwasher to finish a cycle or anti-lock brakes to have interaction.
Unlike the expensive bleeding edge 2 and three nanometer chips made by giants like TSMC, TI’s chips are made on cheaper, legacy nodes: 45 to 130 nanometers.
That measurement “is the sweet spot for analog and embedded because they provide the right performance, the power, the voltage that our portfolio needs,” Yunus stated.
While every TI chip prices about $0.40, based on Arcuri, they play essential supporting roles for the world’s most superior applied sciences. In a brand new partnership with Nvidia, for instance, TI is growing a chip to drive effectivity in power-hungry knowledge facilities.
In 2009, TI made one other daring transfer to assist carry the price of its chips down additional. It opened the world’s first 300 millimeter fab for analog chips, re-purposing a reminiscence fab from Qimonda after the chipmaker went bankrupt within the monetary disaster.
“That’s what really was the catalyst for TI to have such a cost advantage,” Arcuri stated.
The new wafer measurement offers TI “tremendous cost efficiency” as a result of 300mm can match “2.3 times more chips in it versus a 200mm wafer,” Yunus stated. TI’s been closing and selling off some of its 200mm fabs, and all of its seven new fabs will produce on 300mm wafers.
Texas Instruments senior VP of know-how and manufacturing Mohammad Yunus talks to CNBC’s Katie Tarasov within the first of TI’s 4 new chip fabrication crops in Sherman, Texas, on July 24, 2025.
Graham Merwin
Global provide, Texas progress
TI informed CNBC it is the nation’s greatest analog and embedded semiconductor producer, promoting tens of billions of chips annually. About 60% of income comes from clients based outside the U.S., with China making up about 20%.
About 75% of TI’s capital spend occurs within the U.S., but it surely additionally makes chips overseas at fabs in Germany, Japan and China, the corporate informed CNBC. It does testing and meeting in Mexico, Taiwan, the Philippines and Malaysia, the place it is spending $3 billion on two new sites, one among which is now in manufacturing.
TI’s world footprint is a profit within the “dynamic situation” of tariffs proper now, Yunus stated.
“Our manufacturing across 15 different sites provides us the position to be able to support our customers, no matter where they are and in any political or economic environment,” he stated.
Although TI thought of constructing its new websites internationally in locations like Singapore, the corporate finally settled on Sherman, Texas. The small metropolis 65 miles north of Dallas has a inhabitants of simply 50,000 folks. It’s additionally house to a GlobalWafers manufacturing unit. The Taiwan-based firm manufactures the naked silicon wafers that chips, together with TI’s, are made on.
Sherman Mayor Shawn Teamann stated town is now “the hub of the Silicon Prairie.”
Teamann’s grandfather labored alongside Kilby at TI within the Nineteen Fifties. TI first got here to Sherman in 1966, however when it introduced plans to shut its outdated 150mm fab, town enticed TI to stick with incentives like tax breaks and water reductions.
The plan labored, and in 2021, TI introduced it will keep in Sherman with a campus of recent 300mm fabs. Now, the primary of 4 300mm fabs is full in Sherman. Teamann stated the 300mm project has greater than doubled town’s fee of inhabitants progress because it was introduced in 2021.
As for federal help, TI bought $1.6 billion of CHIPS Act funding, and a whopping 35% investment tax credit from Trump’s massive invoice handed in July.
At the state degree, Gov. Greg Abbott has lengthy supplied incentives to chip companies willing to build in the state, from low taxes to the $1.4 billion Texas CHIPS Act handed in 2023.
Samsung is the opposite chip big in Texas since 1996. The South Korean firm is constructing a $17 billion superior chip fab close to Austin. That’s additionally the place Apple, Amazon and AMD design lots of their chips. Other chip corporations in Texas embody Infineon, NXP, X-Fab, Micron, GlobalFoundries, and power provider Applied Materials.
Water, energy, staff
Making chips takes an immense quantity of water, and a few quarter of Texas is in drought.
Luckily, Sherman has water rights to close by Lake Texoma.
“It was about acquiring more rights, ramping up our production and being able to provide for the mass quantities of water it takes to run a semiconductor facility,” stated Teamann, including that the fab has nearly doubled the quantity of water Sherman makes use of.
TI will use about 1,700 gallons of water per minute when the brand new Sherman fab is full, with plans to recycle at least 50% of that, Yunus stated.
Chip manufacturing can be an influence hungry course of, so it helps that Sherman has an influence plant that lately increased capacity. TI’s new Sherman fab will run totally on renewable vitality, stated Yunus, including that making chips on 300mm wafers additionally helps with vitality effectivity.
“You use pretty much the same amount of energy but produce 2.2 to 2.3 times more chips,” he stated.
Texas’ uniquely impartial grid largely cuts the state off from borrowing energy throughout state strains. In 2021, that grid failed throughout an excessive winter storm, causing at least 57 deaths and halting manufacturing at chipmakers like Samsung and NXP. TI informed CNBC it maintained “critical operations.”
“We built redundancy into this facility,” Yunus stated. “We have multiple transmission lines that feed power into the site. We also have large diesel storage tanks that we’re able to use, and generators that can continue to power the site for a few days.”
Highly expert chip engineers are one other scarce useful resource. It’s a expertise pipeline that is been stymied by the dramatic decline of U.S. world semiconductor manufacturing. The U.S. went from holding a 37% share of the market in 1990 to only 10% in 2022, based on the Semiconductor Industry Association.
But TI has developed partnerships with numerous universities, group faculties and the navy to fill the expertise hole essential to fill the roles at its Sherman fab.
“There’s a lot of younger people moving to the area. I actually think it’s going to be easier for them to get the talent now than it would have been 5 to 10 years ago,” Arcuri stated.
With the total $60 billion project, TI stated it expects to create 60,000 U.S. jobs, however the firm couldn’t give an anticipated completion date when requested for one.
“It’s hard to predict when exactly that will take off,” Yunus stated. “We’re hopeful that we’ll continue to build out at a pretty brisk pace, but it really depends on the market.”
Watch the video for an in-depth look at TI’s first accomplished fab in Sherman: https://www.cnbc.com/video/2025/08/22/apple-will-make-chips-at-texas-instruments-60-billion-us-project.html