One of the world's oldest and largest semiconductor makers,
Texas Instruments (TI) offers more than 100,000 products. Its
largest segment is analog semiconductors, which change real-world
signals (such as sound and images) into the digital data streams.
Analog product are used to manage power in all electronic devices;
TI sells these products to customers in the consumer electronics
and industrial markets, among others. The company also makes
embedded processors, which can process data from analog chips and
handle specific tasks in electronic devices. TI's other products
include digital light processing (DLP) chips used in
high-definition projectors, custom semiconductors, and calculators.
It generates most of its sales from the Asia/Pacific region.
The company operates through three segments: analog, embedded
processing, and other. The analog business, which accounts for
about 62% of sales, includes high-volume analog and logic products,
power management semiconductors, and catalog analog products such
as amplifiers and data converters. The embedded processing segment,
which includes digital signal processors (DSPs) and
microcontrollers, generates about 21% of sales. The remaining 17%
of sales comes from smaller products lines such as calculators and
application-specific integrated circuits (ASICs).
TI has design, manufacturing, or sales operations in some three
dozen countries across Asia, Europe, and North America. The
Asia-Pacific region (including Japan) is its leading market,
accounting for more than two-thirds of revenue; Europe accounts for
18% of revenue and the US for about 12%.
Sales and Marketing
The company markets its products through a direct sales force, as
well as via distributors and third-party sales representatives.
Distributors generate about 60% of sales.
The bar chart of TI's sales for the past five years goes from
peak to valley and back up to peak. Sales for 2014 were $13
million, a 7% increase from 2013, and closer to the $13.9 billion
in sales the company posted in 2010. In 2014, the analog and
embedded processing segments grew a healthy 13% and 12%,
respectively. However, sales of the segment of other products
(mainly legacy wireless chips) slipped 14% lower. Power products
led the analog growth and microcontrollers and processors paced the
The company followed higher revenue with a 30% increase in net
income, which hit $2.82 billion in 2014. (The 2010 number was $3.2
billion). Besides the increased revenue, TI's bottom line benefited
from lower restructuring charges.
TI closed 2014 with nearly $3.9 billion in cash flow from
operations, compared to $3.38 billion in 2013.
TI's strategy is to focus on its analog and embedded processing
businesses, which the company expects to account for 90% of revenue
in the next few years (up from 44% in 2006). To that end, the
company wound down its wireless business, moving away from products
for mobile devices and toward embedded markets, which the company
sees as more suitable for growth. The company's R&D spending
was lower in 2014, but that reflected the exit from wireless.
The company is also working to expand its customer base,
including attracting more small customers. In 2013 its largest
customer accounted for just 7% of revenue, compared to nearly a
quarter of revenue in 2009.