How will Texas Instruments account for the cost of its new semiconductor wafer plant?

Design concept for Texas Instruments’ new 300-millimeter semiconductor wafer fabs
Source: Texas Instruments

Texas Instruments Inc. (NASDAQ:TXN) is expanding its chip manufacturing capacity. It announced recently that it will begin construction in 2022 on its new plant for manufacturing 300-millimeter semiconductor wafers. Semiconductor wafers are used in a variety of products, particularly in industrial and automotive electronics.

Texas Instruments (TI) acquired the land for the plant in 2021. Construction on the new plant will begin in 2022, with production of the semiconductor wafers to begin in 2025.


  1. Will Texas Instruments capitalize or expense the cost of the land it purchased for the new plant?
  2. Will the costs incurred in 2022 – 2025 associated with building the new plant be capitalized or expensed?
  3. When will Texas Instruments start depreciating the cost of the building?
  4. Will the cost of the land and the cost of the building be combined into one asset? Why or why not?

Copyright 2021 Wendy M. Tietz, LLC

About Dr. Wendy Tietz, CPA, CMA, CSCA, CGMA

Dr. Wendy Tietz is a professor of accounting at Kent State University in Kent, Ohio, USA. She is also a textbook author with Pearson Education.

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