In a call with analysts following Texas Instruments Q2 results release, President and CEO Haviv Ilan discussed TI’s capacity investments and the importance of geopolitically dependable capacity.
“We and our customers remain pleased with our progress of the expansion of our 300mm manufacturing capacity. These investments reflect our confidence in the opportunity ahead, which remains high for several reasons. First, we have a high level of confidence in the secular growth of semiconductor content, particularly in industrial and automotive, where we have greater exposure and strong product positions. Second, geopolitically dependable, low-cost 300mm capacity will be increasingly critical and valuable, and our investments enable us to support customer demand at scale.”
Ilan further addressed customers’ demand for geopolitical dependable manufacturing capacity during a call with financial analysts.
“Geopolitical dependable capacity is not a new thing for us. We have started to see these requests coming, I think, two or three years ago when tension started to rise. But as we reflect on it now three years in, it’s obvious that there is more and more tension,” said Ilan.
“The highest levels of our customers, I’m talking about leadership of CEO, or Chief Purchasing Officer, are looking at their supply chain and making sure that they are going to be immune from whatever is thrown at them, part of it is geopolitical tension.”
Ilan has an answer for them: “We are a very unique supplier in the sense of we can provide capacity at scale, meaning the amount of wafers and the size of the capacity that we are building is very high. It is a very affordable capacity, us building our parts on 300-millimeter wafers allows for a lower cost per chip, and then building them internally in our assembly and test houses also provides a very good low cost structure.
“And last but not least,” he continued, “is this geopolitically dependable capacity, meaning our fabs are being built in the US, mainly in Texas and in Lehi, Utah. And we provide capacity that is at scale, affordable and dependable.”
“And yes, every time there is some news out there, we are seeing more interest,” Ilan revealed. “We have seen that grow over the last several years. And in that sense, our discussions with our customers are providing us more opportunity to win positions in future platforms. I do believe we are taking a bigger share, and this is part of our confidence to continue with our investments to serve that opportunity moving forward.”
