Texas Instruments selects Sherman for potential $30 billion semiconductor chipmaking campus

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Texas Instruments, based in Dallas, is betting heavily on US-made chips and has an ambitious plan to invest up to $ 30 billion to build up to four new semiconductor factories in Sherman.

TI said Wednesday that it will begin building the first two plants next year to produce its 300-millimeter wafers, which are used in automobiles and trucks to industrial machinery. It estimates that chip production will start by 2025.

Two more plants could be added at the 4.7 million square foot Grayson County facility to meet future chip demand. The company said the plants could employ up to 3,000 workers when completed.

“Sherman offers some unique advantages such as a competitive business environment, access to a highly skilled technical staff and an existing supplier base,” said Kyle Flessner, senior vice president of technology and manufacturing at TI. “Being close to our other manufacturing facilities in Dallas and Richardson will help us further increase our efforts and operational efficiencies as we expand our 300 millimeter manufacturing presence in North Texas.”

In return for Sherman’s election, The Herald Democrat says TI receives significant tax breaks from local governments, including the city, county, Grayson College, and Sherman ISD.

The City of Sherman and Grayson Counties offer 10-year 90% property tax rebates on each plant. Thereafter, the company receives a 20-year discount on 90% of the property taxes for each plant. Grayson College will be offering a 10 year tax break of 50% on each of the plants. And Sherman ISD offers a 10-year cap on property tax receipts under the Texas Chapter 313 Tax Act, which allows large corporate projects to cap the taxes they pay to local public school districts.

The project could add billions to the tax base of the city of roughly 44,000 residents, officials said, who believe it could attract additional businesses to the area.

“It’s easy to cross your eyes at the $ 30 billion, but we believe it will have a huge impact on other companies that may be vertically related to TI – suppliers or customers – that are in the Want to be near that facility and will try to relocate to Sherman, ”Hefton told The Dallas Morning News on Wednesday. “And we are also prepared for them.”

Sherman’s Mayor David Plyler summed up TI’s decision even more precisely.

“We thank God that Texas Instruments made the decision to join our growing, historic, and business-friendly community,” said Plyler.

Texas Governor Greg Abbott celebrated TI’s decision to locate the facility in North Texas.

“This historic investment will not only bring billions of dollars in capital investments and thousands of new jobs to North Texas, but will also make Texas a national leader in semiconductor manufacturing while strengthening the domestic semiconductor supply chain,” Abbott said in a statement.

Texas Instruments, which traces its roots back to 1930, has operated a Sherman facility for decades, but that facility and another in Dallas are currently being closed as the company plans to manufacture a high-tech version of the wafers it produces at those locations.

It is also nearing completion of a new $ 3.1 billion semiconductor plant in Richardson adjacent to an existing TI facility on Renner Road. Company executives said the plant could generate $ 5 billion in additional revenue annually.

In terms of the size of the potential Sherman investment, no current project in Texas comes close to TI’s $ 30 billion estimate. Samsung is considering a location in Williamson County, near Austin, for an estimated $ 17 billion semiconductor plant.

TI’s announcement on Wednesday is not a complete surprise. The company said in August that Sherman and Singapore are contenders for the new plants to make cheaper chips as the next-generation 300-millimeter wafers can produce twice as many.

The new locations in Sherman and Richardson are designed to help TI gain better control over the global supply chain, which experts say has been severely affected by the COVID-19 pandemic.

A view of the Texas Instruments campus in Sherman.  The plant will close and TI will begin building a new campus with at least two semiconductor wafer manufacturing facilities on adjacent land in 2022.

Industry experts believe the chip shortage, which is causing delivery problems for products from new vehicles to computers, could drag on until 2023.

TI has been blamed by other chip manufacturers for not expanding production fast enough, which in part contributes to the global shortage of computer chips. Taiwan Semiconductor Manufacturing Co. named an inadequate supply of TI wafers as a bottleneck, according to Taipei-based industry publication DigiTimes.

On its recent conference call, TI also said it is facing a shortage of parts used to make its chips. Third-quarter sales of $ 4.64 billion were below market expectations as the chipmaker struggled to keep up with demand in recent months.

TI President and CEO Rich Templeton said in a statement that the new facilities in Sherman are part of the company’s strategy “to strengthen our competitive advantage in manufacturing and technology and to support our customers’ demand for decades to come.”

TI took its time ramping up production because it wasn’t sure the higher demand for chips would continue, according to Bloomberg intelligence analyst Woo Jin Ho.Peer companies are increasing investment in new equipment by 25 to 50% annually said Ho.

“So now it’s not just becoming a capacity growth problem, it’s also a potential market share problem,” said Ho.

In June, TI spent $ 900 million to purchase Micron Technology Inc.’s semiconductor facility in Lehi, Utah. It became the company’s fourth 300-millimeter wafer facility.

“While there is growing awareness that the short-term imbalance between supply and demand will end at some point, the secular growth of semiconductors is secular [demand] will continue to grow, and this requires a robust roadmap for manufacturing capacities for 2025 and beyond, “said Dave Pahl, TI chief investor relations officer, in a phone call with analysts and investors in late October.

Dozens of houses are under construction in the Mantua settlement in Van Alstyne.
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https://www.dallasnews.com/business/technology/2021/11/17/texas-instruments-selects-sherman-for-30-billion-semiconductor-chip-manufacturing-campus/