Texas Instruments Incorporated

Texas Instruments Incorporated is an American semiconductor company that designs, manufactures, and sells analog and embedded processing chips to electronics designers and manufacturers worldwide, generating $17.68 billion in revenue in fiscal 2025. The company operates through two principal segments — Analog (79% of revenue) and Embedded Processing (15%) — with a broad portfolio of tens of thousands of catalog products serving over 100,000 customers across industrial, automotive, personal electronics, data center, and communications equipment markets.

This is a story about a company that just spent six years and roughly $20.3 billion of capital building manufacturing capacity ahead of demand, betting that the semiconductor cycle would eventually turn and that owning geopolitically dependable 300mm wafer fabs would be a structural advantage when it did. The cycle has turned. After a 2023–2024 downturn that compressed operating margins from 42% to 35%, revenue rebounded 13% in FY2025 and accelerated further in the first half of 2026, with industrial demand recovering broadly and data center emerging as a genuine growth vector. The file turns on a single question: whether TI can convert its capacity advantage into sustained free cash flow per share growth that justifies the price at which the market is now selling it — roughly 50 times trailing earnings, at the early edge of a recovery.

TI's strengths are not subtle. It owns the largest analog semiconductor franchise in the world, serves customers direct (more than 80% of revenue bypasses distribution), operates 300mm fabs whose unit costs run about 40% below 200mm equivalents, and is nearing the end of a capex cycle just as demand accelerates. The risks are not subtle either: roughly half of TI's revenue touches China in some form; the Embedded Processing segment has struggled for relevance; and the Silicon Labs acquisition, announced in February 2026 at an enterprise value of approximately $7.5 billion, adds integration risk to an already leveraged balance sheet. The market is pricing TI as if the capacity bet will pay off handsomely. Whether it does depends on the sustainability of the recovery, the trajectory of factory loadings, and whether management can make Embedded Processing earn its place in the portfolio.