The facility, which manufactures chips used in hard drives, will be closed in phases over the rest of the year, the company said in a statement Wednesday.
TI's 600 employees at the Santa Cruz site will be laid off.
The company said it will consolidate the Santa Cruz operations with its manufacturing facilities in Dallas and Houston.
"Manufacturing can be more efficiently managed by consolidating this capacity into locations with the potential for higher-volume, more technologically advanced processes," Kevin Ritchie, senior vice president for worldwide manufacturing operations, said in a statement. "This decision, while difficult, increases competitiveness and efficiency."
TI also said the consolidation is part of a previously announced cost-reduction plan and follows the company's decision to shift more of its resources toward what it calls "higher-growth opportunities." These likely include expanding its digital signal processor business.