(The Center Square) - Utah has granted Texas Instruments Incorporated (TI) a tax break to incentivize job creation at its new semiconductor factory in Lehi.

The Utah Governor’s Office of Economic Opportunity granted TI a post-performance tax reduction. The tax break is a part of the state’s Economic Development Tax Increment Financing (EDTIF) program.

“Companies like Texas Instruments continue to invest in Utah because of our world-class business climate and exceptional workforce,” Utah Governor Spencer Cox said in a press release issued by his office. “TI’s new semiconductor factory will solidify Utah as a global semiconductor manufacturing hub for generations to come.”

TI plans to add 800 new jobs and invest $11 billion in Utah as a part of the agreement. It is the biggest economic investment in state history.

“We’re excited Texas Instruments has decided to build a second factory in Lehi,” Ryan Starks, the Office of Economic Opportunity’s executive director, said in the release. “This new factory will bring significant capital investment to the state, along with hundreds of high-tech jobs. This is a big win for the state and Lehi City.”

Texas Instruments designs and produces semiconductors. The company then sells those semiconductors globally to electronics designers and manufacturers. The Dallas, Texas-based company has design, manufacturing, and sales operations in more than 30 countries; it employs about 33,000 people globally.

“Our decision to build a second fab in Lehi underscores our commitment to Utah and is a testament to the talented team there who will lay the groundwork for another important chapter in TI’s future,” Haviv Ilan, TI executive vice president, and chief operating officer, and incoming president and chief executive officer said in the release. “With the anticipated growth of semiconductors in electronics, particularly in industrial and automotive, and the passage of the CHIPS and Science Act, there is no better time to further invest in our internal manufacturing capacity.” 

Texas Instruments may receive a credit of up to 30 percent of the additional state taxes it pays in Utah over the 20-year agreement. If it does, this will come from the Economic Development Tax Increment Financing (EDTIF) tax credit.

If TI meets the criteria laid out in its contract with the state each year, it will receive a portion of the credit.

“The federal government recognized at the front end of the pandemic that our country’s reliance on overseas semiconductor manufacturing is a national security issue. This project represents a significant step toward strengthening the U.S. supply chain,” Scott Cuthbertson, president and CEO of EDCUtah, said in the release. “Texas Instruments’ commitment of this transformational investment will have a lasting impact on Lehi and Utah’s manufacturing industry for generations.”

The governor’s office projects this deal will bring $111,451,554 in new tax revenue to Utah.