Texas Instruments
Bellwether
​
Headquartered in Dallas Texas, the company was founded in 1930. Analog chips and embedded processors are the main focus of the firm. TI also produces calculators, microcontrollers, multi-core processors and digital light processing technology. The firm holds 45,000 patents as of 2016.
​
Business classification and revenue mix in 2022 are:
-
Industrial - 40%
-
Automotive - 25%
-
Personal electronics - 20%
-
Communication equipments - 7%
-
Enterprise systems - 6%
-
Other - 2%
​
Geographical market and revenue mix in 2022 are:
-
11% - United States - (HQ-33%)
-
49% - China - (HQ-24%)
-
13% - Rest of Asia - (HQ-10%)
-
18% - EMEA - (HQ-24%)
-
6% - Japan - (HQ-8%)
-
3% - Rest of World - (HQ-1%)
In 2022, TI started reporting revenue based on end customers HQ to profile where critical decisions are made. This information is useful in understanding risk & impact of re-shoring and near-shoring.
​
Major acquisitions in the past decades were:
-
Burr-Brown Corp. acquired in Jun-2000 for $7.6B. BBC produces analog & mixed-signal integrated circuits used in signal processing.
-
National Semiconductor acquired in Apr-2011 for $6.5B. The firm specialises in analog and subsystem. Products includes power management IC, display drivers, audio & operational amplifiers, communication and data conversion solutions.
​
Financial Performance (9M 2023)
Revenue had been growing for a good decade but has begun to soften due to high inflation, interest rate and weak China post-Covid recovery.
​
Analog portfolio constitute 74% of business and is TI major earning driver; contribution to 78% operating profit.
Embedded processing constitute 19% revenue and 14% operating profit.
Other revenue mix was 7% and operating profit 8%.
​
Industrial and Automotive were expanding while the remaining segments are largely range bound.
​
Texas Instruments started separating China business from Rest of Asia. Since 2022 revenue mix for these regions appear to exhibit weakness. Re-shoring of business to EMEA and United States is evident.
​
Opinion
Texas Instruments is a bellwether for the semiconductor industry. Dynamics in regional business provides us with useful insight on how geopolitical conflicts and trade war are impacting business decisions.
​
There is currently no signal that the semiconductor industry is staging a strong recovery.