Texas Instruments: Buy Before Significant Growth And Margin Improvements


  • TXN is structurally advantaged to gain market share and margins within one of the fastest growing analog semiconductor markets.
  • Fab ownership makes TXN’s supply chain one of the safest among peers, allows it to better control costs and maximize returns on investments.
  • Superior distribution will catalyze margin growth and market share gains, especially with smaller accounts.

Close up image of microchip. Integrated circuit IC macro photograph.

Ismed Syahrul

I expect Texas Instruments (NASDAQ:TXN) to experience accelerating top-line growth above peers coupled with margin expansion from competitive advantages hardly replicable and specific to its long-term strategy.

Business Overview

Texas Instruments (“TI”) designs, manufactures and sells analog and embedded semiconductors. An

Bar Chart of Growth Rate by end market until 2030

CAGR of Semiconductor Demand by End Market (to 2030) (McKinsey)

Stacked bar chart showing the evolution of demand

Automotive Semiconductor Demand Forecast by node size (McKinsey)

Stacked column chart with evolution of revenue per segment since 2010

Share of Revenues by Segment (Company Filings Formatted by Author)

Line chart of operating profit 2013-2022

Operating Margin per Product Segment (Company Filings Formatted by Author)

Table showing the categories of needs and how Ti compares to large and small competitors

Comparison of Product and Services (Tegus, Company Filings Formatted by Author)

Bar chart of cost evolution

Semiconductor Production Costs (Dataquest)

World maps with TXN fab locations specified

TI’s Fabs (Company Filings)

table comparing the productivity of 200mm vs 30mm wafers

Quantified Savings (Company Filings formatted by author)

Bar chart showing evolution of TXN's Capex

TXN’s historic CAPEX (Company Filings formatted by author)

Two pie charts showing the distribution evolution since 2013

Distribution Evolution (Company Filings Formatted by Author)

Progression graph of the ordering process for a ti.com customer

Customer’s Standpoint (Tegus, Company Filings, Formatted by Author)

Table showing website traffic between ADI and TXN

TXN vs. ADI: Latest monthly website traffic data (SimilarWeb)

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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