NEW YORK, Sept 29 (Reuters) - Chip maker Texas Instruments Inc is beginning to hire workers to start production next year in a Texas factory it built in 2006, but held off opening as it waited for chip demand to improve.
TI said the Richardson, Texas facility, which cost $320 million to build, would start shipping products by the end of next year after it begins installing chip making equipment next month. It plans to hire 250 new workers starting immediately.
The company, which uses a mixture of third-party contract manufacturers and TI-run factories, said the facility would have the capacity to make more than $1 billion worth of analog chips per year for devices such as telephones and computers.
TI had to massively scale back chip production capacity earlier this year as orders plummeted due to the recession. It said the new factory was part of efforts to be ready to meet increasing customer demand once the economy improves.
'The time is right for this investment,' TI's Chief Executive Rich Templeton, said in a statement. 'Customer demand for analog chips is growing ... The chips produced here will help our customers make thousands of electronic products that are more energy-efficient.'
TI said the facility would be the world's first analog chip factory to use 300-millimeter (12-inch) silicon wafers, from which it can make double the number of chips it does with the more commonly used 200-millimeter wafers.
The company had originally planned to use the factory to build wireless baseband chips, the main processor in a cellphone, but it since decided to use it for analog chips after it switched its focus away from basebands.
The Richardson factory will be the company's sixth U.S. wafer facility. It also has three wafer factories and six assembly and test facilities overseas. It opened a new assembly and test facility in the Philippines earlier this year.
'We try to look out into the market and make sure we have capacity when customer demand warrants it,' spokeswoman Kimberly Morgan said.
'We feel that right now is the most opportune time to open this facility so we'll be better positioned when the upturn does occur to serve our customers' demand,' she added.
TI plans to use manufacturing equipment it is buying from a bankrupt unit of chipmaker Qimonda AG for the new facility. The $172.5 million equipment purchase has received court approval, but still needs the go-ahead from regulators. This is expected in coming weeks, Morgan said.
TI shares closed down 36 cents, or 1.5 percent, at $23.55 on the New York Stock Exchange.
(Reporting by Clare Baldwin in San Francisco and Sinead Carew in New York; editing by Andre Grenon) Keywords: TEXASINSTRUMENTS/ (sinead.carew@thomsonreuters.com +1 646 2236186) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
TI said the Richardson, Texas facility, which cost $320 million to build, would start shipping products by the end of next year after it begins installing chip making equipment next month. It plans to hire 250 new workers starting immediately.
The company, which uses a mixture of third-party contract manufacturers and TI-run factories, said the facility would have the capacity to make more than $1 billion worth of analog chips per year for devices such as telephones and computers.
TI had to massively scale back chip production capacity earlier this year as orders plummeted due to the recession. It said the new factory was part of efforts to be ready to meet increasing customer demand once the economy improves.
'The time is right for this investment,' TI's Chief Executive Rich Templeton, said in a statement. 'Customer demand for analog chips is growing ... The chips produced here will help our customers make thousands of electronic products that are more energy-efficient.'
TI said the facility would be the world's first analog chip factory to use 300-millimeter (12-inch) silicon wafers, from which it can make double the number of chips it does with the more commonly used 200-millimeter wafers.
The company had originally planned to use the factory to build wireless baseband chips, the main processor in a cellphone, but it since decided to use it for analog chips after it switched its focus away from basebands.
The Richardson factory will be the company's sixth U.S. wafer facility. It also has three wafer factories and six assembly and test facilities overseas. It opened a new assembly and test facility in the Philippines earlier this year.
'We try to look out into the market and make sure we have capacity when customer demand warrants it,' spokeswoman Kimberly Morgan said.
'We feel that right now is the most opportune time to open this facility so we'll be better positioned when the upturn does occur to serve our customers' demand,' she added.
TI plans to use manufacturing equipment it is buying from a bankrupt unit of chipmaker Qimonda AG for the new facility. The $172.5 million equipment purchase has received court approval, but still needs the go-ahead from regulators. This is expected in coming weeks, Morgan said.
TI shares closed down 36 cents, or 1.5 percent, at $23.55 on the New York Stock Exchange.
(Reporting by Clare Baldwin in San Francisco and Sinead Carew in New York; editing by Andre Grenon) Keywords: TEXASINSTRUMENTS/ (sinead.carew@thomsonreuters.com +1 646 2236186) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.