Texas Instruments Shares Surge Amid Price Hikes and Massive U.S. Expansion Plans

Texas Instruments (TI), a leading global analog semiconductor company, recently announced a price increase for its products due to continuous and foreseeable rises in upstream raw material costs. This new pricing will take effect from September 15th.

Industry insiders have noted that TI's eight-inch wafer capacity is severely constrained. To maintain profitability, the company is allocating its limited wafer production to higher-priced products, resulting in significant shortages of lower-cost items priced under $1. This shortfall is particularly acute in the market.

Among TI's products, power management chips are the hardest hit by these shortages and price hikes. This includes the TPS series, TLV series, BQ series, and UCC series. Power management chips are ubiquitous in electronic devices and equipment, and their widespread applications make the shortages even more critical. These chips are essential, low-cost components, compounding the severity of the supply problem.

Texas Instruments has also struck a preliminary, non-binding agreement with the U.S. Department of Commerce for up to $1.6 billion in funding from the CHIPS and Science Act. This will support the construction of three 300mm semiconductor wafer fabs in Texas and Utah.

Additionally, TI expects to receive between $6 billion and $8 billion in investment tax credits from the U.S. Treasury to bolster its semiconductor production plans. This financial and policy support represents a significant step forward for TI in the global semiconductor manufacturing landscape.

Under the provisions of this act, TI plans to invest more than $18 billion to expand its manufacturing capabilities in the U.S., particularly its 300mm wafer production lines. These fabs will produce semiconductors utilizing technology nodes ranging from 28nm to 130nm, which have various applications in analog and embedded processing products across sectors such as automotive, consumer electronics, and industrial equipment.

TI aims to increase its in-house manufacturing rate to over 95% by 2030 to maintain its competitive edge in the global market. As global geopolitical tensions escalate, supply chain security and reliability have become critical concerns for governments and enterprises alike.

The investment by TI is not just about increasing capacity but also ensuring a more stable and secure supply chain in future global competition. The company's fabs in Texas and Utah are expected to meet a broad range of product requirements while leveraging shared infrastructure, talent, and technological resources to form a robust semiconductor manufacturing network.