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 64% 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 application specific integrated circuits (ASICs),
digital signal processors (DSPs) and microcontrollers, generates
about 22% of sales. The remaining 14% of sales comes from smaller
products lines such as calculators and application-specific
integrated circuits (ASICs).
In terms of markets, TI gets about 30% of revenue each from
personal electronics and industrial uses. Automotive and
communications markets account for about 15% each.
TI makes most of its products in facilities in the US, Europe,
The Asia-Pacific region (including China) is its leading market,
accounting for 61% of revenue. Europe accounts for 17% of revenue,
the US generates about 12%, and Japan, 9%.
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. Apple was the biggest
single customer in 2015, making up 11% of revenue.
Sales for 2015 were $13 million, about even in the dollar amount
to 2014. While analog and embedded processor sales increased 3% and
2%, respectively, in 2015, sales of ASICs and DLPs fell 15%.
TI squeezed out a 6% profit increase to just under $3 billion in
2015 with reductions in research and development and sales and
general expenses. Its net profit margin was 23%, the fourth time in
10 years it was over 20%.
TI closed 2015 with nearly $4.3 billion in cash flow from
operations, compared to about $4 billion in 2014.
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. It was 86% in 2015 and 83% iin 2014.
In a marketing move, the company is positioning its website,
TI.com, as a source for buyers of semiconductor products. The
company envisions its business customers shifting their buying
habits to online sources as consumers have done.