In 1958, a new employee at Texas Instruments made history.
Jack Kilby (1923–2005) was an electrical engineer who joined Texas Instruments in the summer of 1958. While the rest of the office took its annual summer break, Kilby remained in the office and studied how to effectively and efficiently reduce the number of wires required to run computers. Up to that point, each part of the computer, transistors, resistors, and capacitors were wired together, which meant computers had miles and miles of wiring. Jack Kilby thought, if he could make all of the parts out of the same material, the “circuit” connections could be made in miniature. The first prototype was made from germanium but was replaced with silicon.
While his colleagues were on vacation, Jack Kilby, a newcomer to the company, spent his time experimenting. His efforts led to the creation of the world’s first microchip—a groundbreaking invention that would become as vital to modern life as water or crude oil.
Fast forward to today, and the global race to produce microchips cost-effectively is fiercer than ever. The U.S. government is now banking on Kilby’s old company, Texas Instruments, to help secure a win. The company recently received a $1.6 billion grant from the U.S. Commerce Department to build new chip manufacturing facilities, including one in Sherman, Texas.
Mackenzie Hawkins, a Bloomberg Technology reporter, discussed the implications of this investment with Texas Standard. The grant is part of the 2022 CHIPS and Science Act, a major initiative by the U.S. government aimed at bringing semiconductor manufacturing back to American soil. The goal is to produce a wide range of chips, from those powering leading AI technologies to more mature, everyday chips found in devices like microwaves and phones—an area where Texas Instruments excels.
Texas Instruments is building up to four factories in Sherman, with two supported by the $1.6 billion grant, alongside $3 billion in loans and up to $8 billion in tax credits. These facilities will focus on producing industrial-grade chips—essential components in a vast array of technologies.
While the spotlight often shines on cutting-edge chips made by companies like Nvidia, AMD, and Intel for AI applications, it’s the shortage of older generation chips that disrupted supply chains during the pandemic, halting production of cars and consumer electronics. Recognizing this, lawmakers included a $2 billion minimum allocation in the CHIPS Act for legacy technologies, ensuring that companies like Texas Instruments receive substantial support.
The investment in Texas Instruments is mirrored by similar grants to other chipmakers like GlobalFoundries, which also focuses on legacy chips. This strategy aims to capture the more mature segment of the semiconductor market, crucial for a variety of industries.
Texas is emerging as a major hub for semiconductor manufacturing. Alongside Texas Instruments, Samsung is poised to receive $6.4 billion in CHIPS Act grants, while Taiwanese company GlobalWafers is set to win $400 million in funding.
These investments are not just about boosting chip production; they are also expected to create thousands of jobs in Texas. The Texas Instruments facilities alone are projected to generate around 2,000 manufacturing jobs, with many more in construction. Samsung’s expansion will also add thousands of jobs, contributing to a broader industrial revival in Texas and across the Sunbelt.
The Biden administration, with bipartisan support, envisions this as the re-industrialization of America. However, challenges remain. Worker shortages, the complexity of building new plants, and fierce global competition will all test the success of these efforts.
While the $1.6 billion grant to Texas Instruments is significant, it’s just a small piece of the $39 billion CHIPS Act. The semiconductor industry requires massive investments, and the road to revitalizing U.S. chip manufacturing will be long and challenging.
