Texas Instruments (TXN) — Company Research

Last Updated: 10 July 2026

Texas Instruments is the world's largest maker of analog and embedded processing semiconductors — the low-cost, high-margin chips that manage power, convert signals and run simple compute inside cars, factory equipment, phones, appliances and, increasingly, AI data-centre power systems. The business model is unusual for a chipmaker: TI owns most of its own 300mm wafer fabs, sells more than 80,000 catalogue parts to over 100,000 customers, and returns nearly all of its free cash flow to shareholders. After a two-year cyclical trough, fiscal 2025 revenue rebounded 13% to $17.68bn and first-quarter 2026 revenue jumped 19% year over year, led by industrial and data-centre demand. In February 2026 TI agreed to acquire Austin-based Silicon Labs for roughly $7.5bn, its largest deal in years. This report walks through the numbers, the valuation and the risks.

1. Company Snapshot

2. Bull & Bear Case

Bull Case

• Analog scale and catalogue moat: TI is the largest analog chipmaker in the world with more than 80,000 parts sold to over 100,000 customers, a breadth no rival matches and a franchise with very long product lifecycles.
• Cyclical recovery underway: After a two-year downturn, FY2025 revenue grew 13% and Q1 2026 rose 19% year over year, with the data-centre business up roughly 90% and industrial up about 30%.
• In-house 300mm manufacturing: TI's owned US fabs (Sherman, Lehi, Richardson) give it structural cost advantage, supply security and eligibility for CHIPS Act incentives as competitors lean on outsourced foundries.
• Silicon Labs acquisition: The ~$7.5bn all-cash deal agreed February 2026 adds wireless connectivity, edge-AI reach and reshored manufacturing, with ~$450m of targeted annual synergies within three years.
• Shareholder returns: 22 straight years of dividend increases and consistent buybacks make TI one of the most reliable capital-return stories in semiconductors.

Bear Case

• Free cash flow compressed by capex: A multi-year fab build-out pushed FY2025 capex to $4.55bn, cutting free cash flow to $2.60bn and leaving the shares on a very high price-to-free-cash-flow multiple.
• Rich valuation: At roughly 53x trailing GAAP earnings the stock prices in a strong recovery; any demand wobble or margin slip could de-rate it quickly.
• Cyclicality and inventory risk: Analog demand tracks industrial and automotive capex; the 2023–2024 slump showed how sharply revenue and margins can fall.
• China and tariff exposure: A large share of revenue touches China and automotive supply chains, exposing TI to tariffs, export controls and local-competitor substitution.

3. Business Segments

4. How It Makes Money

A catalogue business, not a project business. Unlike leading-edge logic makers that chase a handful of giant customers, TI sells tens of thousands of standardised parts at modest prices to a very long tail of customers. Many designs stay in production for a decade or more, so revenue is broad, sticky and less dependent on any single win.

Owning the factory is the strategy. TI manufactures the bulk of its chips in its own 300mm wafer fabs, where the larger wafer yields far more dies per unit of cost than the 200mm fabs most analog peers still run. That internal capacity is the engine behind TI's gross margins and its decision to spend heavily on new US fabs even through the downturn.

Cash goes back to owners. Over time TI aims to return all free cash flow to shareholders through dividends and buybacks. The dividend has risen for 22 consecutive years, and the heavy capex cycle now underway is explicitly framed as building capacity to grow that free cash flow per share over the long run.

5. Financial Health

All figures below are taken from TI's audited annual reports and quarterly earnings releases (SEC filings). TI reports on a GAAP basis and does not publish a separate non-GAAP adjusted EPS, so the Adjusted EPS column mirrors GAAP.

¹ TI does not report a non-GAAP adjusted EPS; the adjusted column mirrors GAAP diluted EPS.

Balance sheet at 31 Dec 2025: long-term debt $13.548bn plus $0.500bn current portion (total $14.05bn), against cash and short-term investments of $4.88bn. Operating cash flow was $7.15bn for FY2025; capital expenditure was $4.55bn as the fab build-out continued.

6. Valuation

Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.

7. What Are They Building

TI's central bet is capacity. The company is spending billions on new 300mm wafer fabs in Sherman, Texas and Lehi, Utah, aiming to make the large majority of its chips in-house on US soil by the end of the decade. Management's argument is that owning geopolitically dependable, low-cost capacity will let TI win share as customers seek supply security, and will compound free cash flow per share once the heavy spending rolls off.

The second build is reach into faster-growing end markets. The data-centre business — power-management chips for AI servers — grew roughly 90% year over year in Q1 2026 off a small base, and the pending Silicon Labs acquisition adds wireless connectivity and edge-AI products aimed at the same industrial and IoT customers TI already serves. Read more market context on the ChartsView Live Charts and Economic Calendar.

8. Peer Comparison

9. Insider Activity

Recent Form 4 filings show routine option-exercise-and-sell activity by directors and officers — common for TI executives whose compensation is heavily equity-based, including chief executive Haviv Ilan. No open-market accumulation was disclosed.

10. Key Risks

• Cyclical demand: Analog and embedded revenue tracks industrial and automotive capital spending, which can fall sharply and quickly, as the 2023–2024 downturn demonstrated.
• Capex and free-cash-flow risk: The multi-year fab build-out keeps capital spending elevated; if end-demand disappoints, free cash flow could stay depressed for longer than the market expects.
• Valuation risk: At roughly 53x trailing earnings the shares leave little room for disappointment on growth or margins.
• China and geopolitical exposure: Tariffs, export controls and the rise of domestic Chinese analog competitors could erode a meaningful slice of demand.
• Integration risk: The ~$7.5bn Silicon Labs acquisition must clear regulators and be integrated successfully to deliver its targeted synergies.
• Margin pressure: Higher depreciation from new fabs and under-utilisation during soft periods can weigh on gross margins.

11. Recent Developments

• 22 Apr 2026 — Strong Q1 2026 results. Revenue of $4.83bn (+19% YoY) and EPS of $1.68 beat expectations, led by industrial and a data-centre business up roughly 90% year over year; the shares hit fresh highs.
• 04 Feb 2026 — Silicon Labs acquisition agreed. TI agreed to buy Austin-based Silicon Labs for $231.00 per share in cash, an enterprise value of about $7.5bn, to expand in wireless connectivity and edge AI; close expected in the first half of 2027 subject to approvals.
• 28 Jan 2026 — FY2025 results. Full-year revenue of $17.68bn (+13%) and GAAP EPS of $5.45 confirmed the cyclical recovery, with the Analog segment up 15%.
• 01 Jul 2026 — Q2 2026 call scheduled. TI confirmed it will report second-quarter results on 22 July 2026, guiding revenue of $5.0–$5.4bn and EPS of $1.77–$2.05.

12. Key Dates

• 22 Jul 2026 — Q2 2026 earnings release and conference call
• Expected Oct 2026 — Q3 2026 earnings release (late October)
• Expected H1 2027 — targeted completion of the Silicon Labs acquisition

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Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.