Texas Instruments Points To A Spicier Dip For Chips

Summary:

  • Texas Instruments posted a soft quarter, with excess capacity having a more noticeable impact on gross and operating margin despite basically in-line revenue and ongoing growth in the auto market.
  • Guidance was the real story this quarter; with a steep cut to guidance relative to Street expectations, TI has signaled that they haven’t yet reached the bottom of the cycle.
  • TI’s policies will worsen the margin and FCF hits in the short term, but should solidify the company’s position with major customers and leave the company well-placed for the upturn.
  • Trading a little below my fair value estimate, something not so common with a well-liked tech company, these shares are getting more interesting.

Texas Instruments Inc (TI) HQ in Silicon Valley

Sundry Photography

It’s not entirely true that “as Texas Instruments (NASDAQ:TXN) goes, so goes the chip sector”, but the fact remains that TI is a major player in a range of semiconductor markets and products, and you ignore the performance of


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