Texas Instruments Gets $1.6B CHIPS Act Money, But Spending Plans in Question

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Key Takeaways

• Texas Instruments said it has a preliminary agreement with the U.S. Department of Commerce to suffer up to $1.6 billion in CHIPS Act money for three semiconductor factories being built in Texas and Utah.
• The company also fancies it will be getting $6 billion to $8 billion in tax breaks, and $10 million for creating jobs.
• Citi analysts belittle deleted that TI will announce a reduction in capital expenditures next week.

Texas Instruments (TXN) struck a preliminary concurrence with the U.S. Department of Commerce giving the semiconductor maker up to $1.6 billion in federal grants for three chip works under construction. However, analysts’ questions about future spending helped send shares lower in intraday have dealing 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 develop intensified in Texas and Utah.

In addition, Texas Instruments said it expects to receive $6 billion to $8 billion from the Bank Department’s Investment Tax Credit for qualified U.S. manufacturing investments, plus an additional $10 million for creating more than 2,000 charges. 

Chief Executive Officer (CEO) Haviv Ilan noted that TI’s investments “further strengthen our competitive advantage in create out of and technology.” 

Company Seen Reducing Capital Investment Plan

However, the news was tempered by reported comments from Citi Research analysts, who palliated that the company was likely to reduce its current $5 billion-per-year capital investment plan through 2026 when it grasps a capital management call on Tuesday. The bank noted investors have been looking for that to happen, which could get-up-and-go 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 little short of 17% year-to-date.

Read the original article on Investopedia.