Key Takeaways
- Texas Instruments said it has a preliminary agreement with the U.S. Department of Commerce to receive up to $1.6 billion in CHIPS Act money for three semiconductor factories being built in Texas and Utah.
- The company also believes it will be getting $6 billion to $8 billion in tax breaks, and $10 million for creating jobs.
- Citi analysts wrote that TI will announce a reduction in capital expenditures next week.
Texas Instruments (TXN) struck a preliminary agreement with the U.S. Department of Commerce giving the semiconductor maker up to $1.6 billion in federal grants for three chip factories under construction. However, analysts’ questions about future spending helped send shares lower in intraday trading Friday.
The company noted that the money from the CHIPS and Science Act of 2022 would be used to support three 300mm semiconductor wafer fabs being built in Texas and Utah.
In addition, Texas Instruments said it expects to receive $6 billion to $8 billion from the Treasury Department’s Investment Tax Credit for qualified U.S. manufacturing investments, plus an additional $10 million for creating more than 2,000 jobs.
Chief Executive Officer (CEO) Haviv Ilan noted that TI’s investments “further strengthen our competitive advantage in manufacturing and technology.”
Company Seen Reducing Capital Investment Plan
However, the news was tempered by reported comments from Citi Research analysts, who explained that the company was likely to reduce its current $5 billion-per-year capital investment plan through 2026 when it holds a capital management call on Tuesday. The bank noted investors have been looking for that to happen, which could drive shares higher. Today’s announcement may change that dynamic.
Shares of Texas Instruments slipped 1.5% to $198.99 as of 12:10 p.m. ET Friday but are up almost 17% year-to-date.