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TI Taps Texas as Site for Next Semiconductor Manufacturing Facility

Jun 30, 2003

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Groundbreaking Expected By End of 2005

Partnership Yields the State's Largest Modern Day Private-Sector Economic Development Project

DALLAS (June 30, 2003) -- Texas Instruments Incorporated (TI) (NYSE: TXN) has selected Richardson, Texas, as the site for its next major semiconductor manufacturing plant. Groundbreaking is expected by the end of 2005.

The facility will build the world's most advanced semiconductors on 300-millimeter (12-inch diameter) silicon wafers, the second TI plant with such capability. The facility will represent an approximate investment of $3 billion by TI over a multi-year period subsequent to groundbreaking. When fully operational, the facility is expected to employ up to 1,000 people.

The selection of Texas as the location for the plant is the result of collaboration between TI, the State of Texas, the University of Texas System and several local governmental and economic development entities. This joint effort will promote the North Texas region's technological future and boost funding for engineering and research programs at the University of Texas at Dallas (UTD).

"TI spends almost $1 billion a year on capital and a significant portion will continue to stay in Texas with this planned expansion. This state has been a great home for TI for many years. The opportunity to contribute to the development of the Texas economy through cooperative agreements with the government and higher education institutions takes us into a new era," said Tom Engibous, chairman, president and CEO of TI. "This new facility and the enhanced research and engineering programs at UTD are great news not only for TI and its customers, but for the state and nation as a whole."

Working Together with State and Academia
Underscoring the company's long-standing commitment to education, TI officials worked closely with policymakers who earmarked millions in new funding for the Erik Jonsson School of Engineering and Computer Science at UTD. Named for one of TI's founders, the Jonsson School is among the fastest growing engineering programs in the country. More than $300 million in new funding from a combination of private and public sources will be directed to the Jonsson School as a result of TI selecting Texas for its next manufacturing site. Included is $50 million from the newly created Texas Enterprise Fund as part of the State's economic development package for TI.

"The State's commitment to a large investment in the Jonsson School was important in our decision to locate a facility of this magnitude here in North Texas," said Mr. Engibous. "UTD is now poised to move into the ranks of the country's great engineering schools. We all stand to gain from the well-educated workforce and top-notch R&D programs this effort will produce."

Texas Governor Rick Perry also hailed the selection of the site.

"This is the largest modern day private-sector economic development project ever undertaken in the State of Texas. The thousands of jobs it eventually will create are exactly what we expect from the Texas Enterprise Fund and our other economic development efforts," said Governor Perry.

United States Senator Kay Bailey Hutchison said in support of this announcement, "Texas Instruments is making a lasting contribution to the future of UT Dallas and to Texas. I will work to add federal resources to the research capabilities of this partnership."

Small Scale Products in Large Scale Production
Groundbreaking for TI's new fabrication facility, or "fab", a few miles north of the company's headquarters in Dallas, is expected to occur before the end of 2005 pending attainment of appropriate permits and incentives as well as market demand. When completed, the planned facility will be one of the most advanced semiconductor manufacturing facilities in the world, producing a wide range of digital signal processing (DSP) and analog-based system-on-chip (SoC) devices for wireless, broadband and digital consumer applications.

Much as it did with its first 300-mm facility, DMOS 6 in Dallas, TI plans to construct the building and infrastructure ahead of market demand, followed by stages of equipment installation as demand increases. This construction method spreads capital investment over a period of years and allows the company to increase production quickly as customers demand more products. This is particularly important due to TI's continued focus on DSP and analog semiconductors. DSP revenue growth is outpacing other semiconductor markets and analog is now the largest segment in the semiconductor industry. TI has been producing 300-mm wafers in DMOS 6 since 2001.


Quote Sheet

Safe Harbor Statement
Statements contained in this press release regarding construction of a wafer fabrication facility and other statements of management's beliefs, goals and expectations may be considered forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. The following factors and the factors discussed in TI's most recent Form 10-K could cause actual results to differ materially from the statements contained in this press release: the market demand for semiconductors and the availability of incentives and approvals relating to construction. We disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

About Texas Instruments
Texas Instruments Incorporated provides innovative DSP and analog technologies to meet our customers' real world signal processing requirements. In addition to Semiconductor, the company's businesses include Sensors & Controls, and Education Technology. TI is headquartered in Dallas, Texas, and has manufacturing, design or sales operations in more than 25 countries.

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