Texas Instruments is set to kick off chip earnings season. Analog is still an issue.

Earnings season is about to kick into full swing and Texas Instruments (NASDAQ:TXN) is leading off for the semiconductor industry. And while last quarter may have suggested that there is “light at the end of the tunnel,” any recovery in analog is likely to be uneven.

The automotive and industrial supply chains are likely to see a “softer than seasonal” December quarter, with headwinds going into the first-half of 2025, analysts at investment firm Mizuho Securities said. Reasons include “softer than seasonal” demand for automotive and electric vehicles; a soft outlook in the broader industrial market with no recovery in sight; and a domestic analog scenario in which competition is increasing for global companies.

Other concerns include supply overwhelming demand in the silicon carbide market amid weak electric vehicle demand.

As such, the analysts lowered their December quarter estimates for Texas Instruments, NXP Semiconductors (NXPI), Microchip Technology (MCHP), ON Semiconductor (ON) and Allegro MicroSystems (ALGM). They raised their price target on Texas Instruments, moving to $200 from $190, but lowered their price targets on the other four.

They have Outperform ratings on NXP, Microchip, ON Semiconductor and Allegro and a Neutral rating on Texas Instruments.

Texas Instruments is slated to report quarterly results and guidance after the close of trading on Oct. 22. A consensus of analysts expect the company to earn $1.41 per share on $4.12B for the third quarter.

Uneven recovery

Despite the negative sentiment, there are some bright spots in the analog space, Mizuho analysts said, as ON Semiconductor and Allegro MicroSystems appear “best positioned” among the group, thanks to their portfolios in renewables and powertrain-agnostic areas. However, analog pricing in the December quarter could be down between 5% and 10%, making any positive sentiment fleeting, the analysts added.

“[We] see headwinds with EV growth slowing with lack of affordable models launching in 2025E,” the analysts wrote, noting that weak demand and continued model push outs have hampered the automotive industry.

“We believe Auto OEMs for 2025E are targeting 10%+ y/y declines in semis [average selling prices], with we estimate overall analog pricing down ~5-10% y/y,” the analysts wrote.

And with global manufacturing PMIs for the U.S., E.U. and China all below 50, the industrial area is likely to remain weak for some time, the analysts said.

“We believe analog/industrial lead times continue declining and inventories remain elevated at customers, with no imminent demand recovery.”