- Company name
- Texas Instruments
- Sector
- Analog semiconductors
- About
- Texas Instruments designs and makes analog and embedded processing chips. Analog chips manage power and convert real-world signals, and embedded processors control electronic systems. Its main markets are industrial, automotive, data center, personal electronics and communications equipment. TI makes chips in its own factories, including 300mm wafer factories in Sherman, Texas, and Lehi, Utah. Revenue was $20.77 billion in the 12 months to September 30, 2026. In Q3 2026, Analog revenue was $4.91 billion and Embedded Processing revenue was $858 million. China gave 23% of revenue in Q3 2026. In February 2026, TI agreed to buy Silicon Labs, a maker of wireless connectivity chips.
- Thesis
- The market prices Texas Instruments for the risk that the current chip upturn is a normal cycle that will end, and for the cost of its factory build and its next purchase. Revenue grew 28% in Q3 2026 as industrial, automotive and data center demand recovered. But analog demand moves in cycles, and the stock fell 10.7% on November 5, 2026, when chip stocks fell sharply across the market. TI spent heavily on new 300mm factories, and free cash flow fell to $2.4 billion in the 12 months to September 30, 2025. In February 2026, it agreed to buy Silicon Labs for about $7.5 billion in cash, which adds debt. For the gap to close, three things must be true. Revenue must stay within the Q4 2026 guidance of $5.80 billion to $6.30 billion and grow in 2027. Capital spending must stay low, as TI expects $2 billion to $3 billion in 2026, so that free cash flow stays near the $8.42 billion of the last 12 months. The Silicon Labs deal must close in the first half of 2027 and give the more than $450 million of yearly savings that TI expects within three years. The Q4 2026 report, expected in late January 2027, is the next test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a new downturn or new trade limits with China.
- Risks
- Chip demand moves in cycles. Customers bought more in 2026 as the market recovered, and revenue grew 28% in Q3 2026. If customers have enough stock or the economy weakens, revenue and factory use can fall, and TI's large fixed factory costs then lower margins.
China gave 23% of revenue in Q3 2026. Trade limits, tariffs or actions by China against U.S. chips can lower sales, and Chinese analog makers compete on price.
The Silicon Labs purchase for about $7.5 billion needs regulatory approvals and adds debt. TI must move Silicon Labs production into its own factories to get the expected savings.
Part of TI's cash flow comes from CHIPS Act incentives, $1.10 billion in the 12 months to September 30, 2026. The direct funding depends on milestones, and a change in policy can lower it.
- Balance sheet
- Cash: $8.1B
Debt: $13.6B
Net debt: $5.4B
Interest cover: 17×
Undrawn credit line: $1.0B, to March 2027
Debt due within 12 months: $650M
Texas Instruments funds itself with fixed-rate notes. Debt was $13.56 billion at September 30, 2026, of which $650 million is due within one year, and TI retired $500 million of maturing debt in September 2026. Cash is cash and short-term investments of $8.14 billion. Interest cover is operating profit divided by interest and debt expense for the first nine months of 2026. The $1 billion revolving credit facility, which runs until March 2027, was undrawn, and TI had no commercial paper. For the Silicon Labs purchase, TI signed a $5 billion 364-day delayed draw term loan facility in June 2026, which was undrawn, and in October 2026 it sold $2.0 billion of notes due 2028 to 2036. Free cash flow was $8.42 billion in the 12 months to September 30, 2026, including $1.10 billion of CHIPS Act incentives, and TI paid $5.17 billion of dividends in that period. TI expects capital spending of $2 billion to $3 billion in 2026.
As of 2026-09-30.
- Checkpoints
- Jan 26, 2027 (estimate): Q4 2026 results and Q1 2027 outlook. Pending. Watch: Q4 revenue within $5.80 billion to $6.30 billion and a Q1 2027 outlook above the $4.83 billion of Q1 2026 pass; revenue below the range or an outlook for lower revenue than a year earlier fail.
Q2 2027 (estimate): Silicon Labs deal closes. Pending. Watch: A close in the first half of 2027 with all approvals passes; a delay past mid-2027 or a block by a regulator fails.
- Recent events
- 2026-10-26: TI priced $2.0 billion of senior notes in four series of $500 million: 5.000% notes due 2028, 5.350% notes due 2031, 5.500% notes due 2033 and 5.750% notes due 2036. The money pays part of the Silicon Labs price. If the deal does not close, TI must redeem the notes at 101% of face value.
2026-10-21: TI reported Q3 2026 results. Revenue grew 28% to $6.06 billion, and 11% from Q2, with growth in industrial, automotive and data center. EPS was $2.62, up from $1.48. Free cash flow was $8.42 billion for the last 12 months. TI expects Q4 2026 revenue of $5.80 billion to $6.30 billion and EPS of $2.45 to $2.79.
2026-09-17: TI raised its quarterly dividend by 7% to $1.52 per share, its 23rd yearly increase in a row.
2026-07-22: TI reported Q2 2026 results. Revenue grew 23% to $5.46 billion, and EPS was $2.14. Free cash flow was $6.53 billion for the last 12 months.
2026-05-27: The board named Julie Knecht, the Chief Accounting Officer, as Chief Financial Officer from August 1, 2026. Rafael Lizardi retires after 25 years with TI.
2026-04-22: TI reported Q1 2026 results. Revenue grew 19% to $4.83 billion, and EPS was $1.68.
2026-02-04: TI agreed to buy Silicon Labs for $231.00 per share in cash, an enterprise value of about $7.5 billion. TI expects to close the deal in the first half of 2027, after regulatory and Silicon Labs stockholder approvals. It expects more than $450 million of yearly savings within three years and plans to move Silicon Labs production into its own factories.