TI Building New $3B Fab in Texas

Texas Instruments this week said it is building a new chip manufacturing plant in Richardson, Texas starting at the end of 2005.

The $3 billion plant will produce advanced semiconductors on 300-millimeter (12-inch diameter) silicon wafers. This will be the second TI plant with such capability. The first being a 2-year-old fab in North Dallas. When fully operational, the new facility is expected to employ up to 1,000 people. Insiders say that won’t happen until 2007.

The Dallas-based chipmaker said the location for the plant announced Monday is the result of collaboration between TI, the State of Texas, the University of Texas System and several local governmental and economic development entities. The company said the joint effort would promote technology and the economy in North Texas as well as boost funding for engineering and research programs at the University of Texas at Dallas (UTD).

“TI spends almost $1 billion a year on capital and a significant portion will continue to stay in Texas with this planned expansion. This state has been a great home for TI for many years. The opportunity to contribute to the development of the Texas economy through cooperative agreements with the government and higher education institutions takes us into a new era,” TI chairman, president and CEO Tom Engibous said in a statement.

On certain benefactor is the Erik Jonsson School of Engineering and Computer Science at UTD. Named for one of TI’s founders, the school is about to get $300 million in new funding from a combination of private and public sources as a result of the new fab. Included is $50 million from the newly created Texas Enterprise Fund as part of the State’s economic development package for TI.

The new plant comes at a time when the chip manufacturing industry is seeing more conversions from 200 mm to 300 mm wafers.

Of the major U.S. semiconductor making companies only IBM and Intel have been able to build their own 300 mm plants. Motorola and Advanced Micro Devices have not.

In addition to making chips for itself, TI also makes chips for Sun Microsystems .