The Legacy Semiconductor Hustle

While the semiconductor spotlight often shines on advanced nodes and bleeding-edge AI hardware, legacy process technologies remain essential. Texas Instruments (TI) is committing over $30B to legacy node capacity—underscoring their enduring value in automotive, industrial, and power electronics. This analysis examines the economics, maintenance dynamics, third-party ecosystem, and compliance strategies that make legacy fabs not just relevant—but critical.

1. Mature Nodes, Enduring Demand: Strategic Capacity Allocation

Texas Instruments is investing $30 billion in four new fabs in Sherman, Texas—dedicated to legacy nodes (≥45nm and older). These nodes dominate in sectors requiring:

• High reliability over transistor density

• Thermal stability for automotive and industrial use

• Long product lifecycles (>10 years in many cases)

Despite media focus on 3nm and 2nm nodes, over 60% of semiconductor volume is still built on mature processes. These chips are in everything from motor controllers to battery management units (BMUs).

2. Cost Efficiency: Depreciated Tools, Optimized CapEx

Advanced-node fabs require EUV lithography tools (e.g., ASML Twinscan NXE), each costing >$150M. In contrast:

• Legacy fabs use fully depreciated immersion scanners and refurbished equipment.

• Lower power consumption and cooling costs reduce total cost of ownership (TCO).

• Tool reuse reduces both capex per wafer and time-to-ramp for new facilities.

TI’s cost-per-wafer on legacy nodes can be up to 70% lower than leading-edge nodes, especially when leveraging long-life tools and in-house process optimization.

3. Fab Maintenance Model: Hybrid In-House and Specialist Services

TI’s maintenance model is hybridized:

• 60% handled internally: Routine equipment checks, tool resets, and diagnostics.

• 40% outsourced: Complex tasks like chiller rebuilds, deionized water systems, gas system repairs.

This allows cost control without compromising uptime. Third-party partners like Shermco, TDIndustries, and Hopper Mechanical are brought in for time-sensitive or hazardous work, where failure could lead to million-dollar outages.

4. Third-Party Ecosystem: Hidden Infrastructure Enablers

TI’s fab uptime relies heavily on mission-critical suppliers:

• Air Liquide provides nitrogen, hydrogen, and oxygen through on-site delivery pipelines.

• U.S. Water handles wastewater recycling and chemical disposal.

• Mechanical contractors deliver HVAC, cooling towers, and cleanroom calibration.

These firms are deeply integrated into fab operations, often with SLAs linked to downtime penalties.

5. Maintenance Speed: Redundancy Buys Time, Not Continuity

TI fabs are designed with redundant pumps, chillers, and filtration systems, but redundancy is temporal—it delays disruption rather than preventing it.

• Critical systems like scrubbers and DI water plants often have 4–6 hours of buffer capacity.

• Downtime costs can exceed $100,000 per hour in high-volume fabs.

• Tier-1 contractors are expected to respond in <2 hours to critical failures.

This just-in-time repair model necessitates high-trust relationships and predictive maintenance telemetry.

6. Environmental Compliance: The Not-So-Secret Battle for Sustainability

Environmental regulations are another critical piece of the puzzle. Semiconductor fabs, especially legacy ones, face strict requirements when it comes to air and water emissions. Texas Instruments, for example, works with various consultants and the Texas Commission on Environmental Quality to stay within permissible emission levels. This is not just about staying within legal limits but also about maintaining a good corporate image and ensuring sustainable operations.

The challenge? As the industry grows, so does the need to deal with wastewater, remove heavy metals, and meet rising environmental standards. While the cost of compliance is high, failing to meet these requirements could mean shutdowns or hefty fines, making environmental compliance a critical component of fab operations.

7. Strategic Outlook: Why Legacy Nodes Still Win

Legacy nodes enable stable margin profiles, especially when supported by in-house tool support, vertically integrated design IP, and targeted fab investments in the U.S. and Japan.