About Texas Instruments Incorporated

Texas Instruments sticks to basics -- producing analog and embedded processors, the workhorses of the industry. The company's analog chips manage power in electronic equipment and its embedded processors handle specific tasks in electronic devices. TI's customers, which number about 100,000, use the company's chips for applications that include autos, industrial machinery, consumer electronics, communications devices, and calculators. The company also sticks to basics in production, operating its own manufacturing plants, which is places around the world. Another TI basic: TI engineer Jack Kilby was credited as co-inventor of the integrated circuit in the late 1950s.

Operations

Texas Instruments operates through three segments: Analog, Embedded Processing, and Other products.

The Analog business, which accounts for about two-thirds of sales, includes high-volume analog and logic products, power management semiconductors, and amplifiers and data converters. The company's analog products are used in the personal electronics, automotive, and industrial markets, as well as others.

The Embedded Processing segment, which generates more than a fifth of sales, makes application specific integrated circuits (ASICs), digital signal processors (DSPs), and microcontrollers. TI's embedded processors range from low-cost microcontrollers used in products such as electric toothbrushes to complex devices used in automotive applications such as infotainment and advanced driver assistance systems.

The remaining revenue comes from the Other segment, which includes digital light processors (DLP), used in projectors to create high-definition images, and calculators, custom semiconductors, and royalties received from licensing of the company's patent portfolio.

In terms of markets, TI gets about a third of revenue from industrial, about 25% from personal electronics, about a fifth from automotive, about 10% each from communications and enterprise.

TI operates 15 manufacturing sites in nine countries.

Geographic Reach

China is the biggest single market for Texas Instruments, accounting for about 45% of revenue with other Asia/Pacific countries (including Japan) accounting for more than 20% of revenue. The US generates about 12% of TI's sales. The company has facilities for service, sales, and other functions in the US, Europe, and Asia.

Sales and Marketing

Texas Instruments markets its products through a direct sales force, as well as via distributors and third-party sales representatives. Distributors generate about 60% of sales. About two-thirds of revenue comes from some 100 customers.

Financial Performance

Texas Instruments has had a decade of up-and-down revenue as well as four straight years of rising profits. In 2016, revenue rose 3% to $13.4 billion from 2015 and profit jumped 20% to $3.6 billion. TI's 27% net profit margin was second only to Linear Technology's 33% among its competitors.

The Embedded Processing unit paced the company's revenue increase, adding more than $235 million (8% higher). The bigger Analog unit's sales rose nearly $200 million (a 2% increase). Automotive was a key market for TI in 2016 with sales rising 22%. The company ships products from the analog and embedded units for automotive applications. In TI's Other segment, DLPs were the only products with higher year-over-year revenue.

Higher revenue and lower cost of revenue and restructuring charges helped drive net income to $3.6 billion, a 20% increase.

Cash flow from operations rose to $4.6 billion in 2016 from $4.3 billion in 2015 on higher net income and lower costs in several areas including depreciation and stock compensation.

TI highlights free cash flow as a financial measure. It rose to about $4 billion in 2016 from $3.8 billion in 2015. Free cash flow is cash flow from operations minus capital expenditures. It is money than can be invested back into the business or returned to shareholders through dividends and stock buybacks. TI returned about $3.8 billion to stockholders through stock buybacks and dividends in 2016.

Strategy

Texas Instruments focus on its Analog and Embedded Processing units is paying off. They combined to product 86% of the company's revenue, almost double since 2004. The company believes that analog and embedded processors offer diversity of applications, long product life cycles, and lower-cost manufacturing processes.

TI has identified two markets where analog and embedded processes can generate growing sales over time: industrial and automotive. More and more functions are handled by semiconductors in industrial machinery and vehicles. In 2016, automotive and industrial combined to provide just more than half of TI's revenue, up from 42% in 2013. TI is investing heavily in processors for those markets, shifting resources from products for other markets. It reduced overall R&D in products for the personal electronics market, but is making selective investments in it.

On the manufacturing end, TI is moving to produce more chips on 300-millimeter wafers, which hold more chips than the standard 200-millimeter wafers. Making chips on the bigger wafer reduces costs 40%. The company has 300-millimeter capacity in its Dallas and Richardson fabrication facilities and is adding more.

Unlike its rapidly consolidating competitors, TI has not made recent acquisitions nor has it been a serious target for acquisition. Its last major deal was to buy National Semiconductor in 2011. Other semiconductor companies have spent billions on mergers and acquisitions in recent years to amass market share and diversify product lines.

- Show Less + Show Full Description

Company News and Press Releases

- Show Less + Show More News and Press Releases

Texas Instruments Incorporated

12500 Ti Blvd
Dallas, TX 75243-0592
Phone: 1 (214) 479-3773
Fax: 1 (972) 480-6881

Stats

  • Employer Type: Public
  • Stock Symbol: TXN
  • Stock Exchange: NASDAQ
  • Chairman, President, and CEO: Richard K. Templeton
  • SVP, CFO and Chief Accounting Officer, Finance and Operations: Rafael R. Lizardi
  • Chairman, President, and CEO: Richard K. Templeton
  • 2016 Employees: 29,865

Major Office Locations

  • Dallas, TX

Other Locations

  • Laguna Beach, CA
  • San Diego, CA
  • Santa Clara, CA
  • Sunnyvale, CA
  • Longmont, CO
  • Washington, DC
  • Deerfield Beach, FL
  • Deland, FL
  • Norcross, GA
  • Schaumburg, IL
  • Warrenville, IL
  • West Chicago, IL
  • Carmel, IN
  • Attleboro, MA
  • Waltham, MA
  • Germantown, MD
  • Novi, MI
  • Bloomington, MN
  • Rochester, MN
  • Manchester, NH
  • Bethlehem, PA
  • Knoxville, TN
  • Double Oak, TX
  • Fort Worth, TX
  • Mc Kinney, TX
  • Plano, TX
  • Richardson, TX
  • Sherman, TX
  • Stafford, TX
  • Sugar Land, TX
  • West Lake Hills, TX
  • Beijing, China
  • Kongens Lyngby, Denmark
  • Oulu, Finland
  • Cesson Sevigne, France
  • Saint Priest, France
  • Ahmedabad, India
  • Bengaluru, India
  • Chennai, India
  • Mohali, India
  • Mumbai, India
  • New Delhi, India
  • Pune, India
  • Secunderabad, India
  • Aizuwakamatsu, Japan
  • Fukuoka, Japan
  • Hayami-Gun, Japan
  • Hiroshima, Japan
  • Inashiki-Gun, Japan
  • Iwaki, Japan
  • Kanazawa, Japan
  • Kyoto, Japan
  • Matsumoto, Japan
  • Nagoya, Japan
  • Osaka, Japan
  • Saitama, Japan
  • Sambu-Gun, Japan
  • Yokohama, Japan
  • St. Petersburg, Russia
  • Chinchon, South Korea
  • Göteborg, Sweden
  • Lund, Sweden
  • Zürich, Switzerland
- Show Less + Show More