PresentationMike BeckmanVP & Head of Investor Relations Good morning, and welcome to the Texas Instruments 2026 Capital Management Call. I'm Mike Beckman, Head of Investor Relations, and I'm joined by our Chairman, President and Chief Executive Officer, Haviv Ilan; and our Chief Financial Officer, Rafael Lizardi. This call is being broadcast live over the web and can be accessed through our website at ti.com/ir. In addition, today's call is being recorded and will be available via replay on our website, al ...

Texas Instruments 2026 Capital Management Call Summary Company Overview - **Company**: Texas Instruments (NasdaqGS:TXN) - **Date of Call**: February 24, 2026 - **Speakers**: Mike Beckman (Head of Investor Relations), Haviv Ilan (Chairman, President, and CEO), Rafael Lizardi (CFO) Key Industry Insights - **Market Recovery**: The semiconductor market is recovering, but at a more modest pace compared to previous cycles, with unit shipments still below historical trends [12][26] - **End Markets Focus**: Texas Instruments emphasizes growth in industrial, automotive, and data center markets, which collectively accounted for approximately 75% of revenue in 2025 [13][25] - **Automotive Sector**: There is a growing opportunity in the automotive sector due to increased content in vehicles, including battery electric, hybrid, and internal combustion engines [13][14] - **Industrial Sector**: The industrial market is expected to see continued growth driven by automation, sensing requirements, and energy efficiency [14] - **Data Center Market**: The data center market is characterized by ongoing investment and growth, with TI's products supporting various infrastructure needs [15][16] Financial Performance and Projections - **2025 Financials**: - Operating cash flow was $7.2 billion, a 13% increase from the previous year [26] - Capital expenditures (CapEx) were approximately $4.6 billion, representing 26% of revenue [26] - Free cash flow per share was $3.23, a 97% increase from 2024 [27] - **2026 Projections**: - Expected CapEx for 2026 is projected to be between $2 billion and $3 billion [9][10] - Anticipated free cash flow per share is expected to exceed $8, with potential for higher based on revenue growth [27][35] - **Dividend Policy**: Texas Instruments has consistently increased its dividend for 22 consecutive years, with a 4% increase in Q4 2025 [28] Capital Allocation Strategy - **Long-term Focus**: The company aims to maximize long-term growth of free cash flow per share, which is viewed as the primary driver of long-term value [4][32] - **Investment in Growth**: Over the past decade, TI has allocated approximately $109 billion in capital, with a significant portion directed towards R&D, sales, marketing, and manufacturing capacity [10][11] - **Acquisition Strategy**: The recent acquisition of Silicon Labs is expected to enhance TI's position in embedded wireless connectivity solutions, with a focus on strategic and financial alignment [10][58] Competitive Advantages - **Manufacturing and Technology**: TI's competitive advantages include a strong manufacturing base, a broad product portfolio, extensive market reach, and long-lived positions in various markets [5][6] - **Internal Supply Chain Control**: More than 90% of TI's wafers and assembly are manufactured internally, providing cost advantages and greater control over the supply chain [18][19] - **300mm Wafer Production**: Investments in 300mm wafer production are expected to lower costs and enhance capacity, with a goal of producing over 95% of wafers internally by 2030 [23][22] Additional Insights - **R&D Investments**: R&D investments are focused on growth opportunities in industrial, automotive, and data center markets, reflecting the belief in their long-term potential [24] - **Inventory Management**: TI aims to maintain high levels of customer service and minimize obsolescence, with inventory days targeted between 150-250 days [9][72] - **Market Signals**: The company is monitoring market conditions closely, with expectations for continued growth in key sectors, particularly automotive and data centers [78] This summary encapsulates the key points discussed during the Texas Instruments 2026 Capital Management Call, highlighting the company's strategic focus, financial performance, and market outlook.

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - The Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the short term [3] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [4] Value Score - The Value Style Score identifies attractive and discounted stocks using ratios like P/E, PEG, and Price/Sales [4] Growth Score - The Growth Style Score focuses on a company's financial health and future outlook, analyzing projected and historical earnings, sales, and cash flow [5] Momentum Score - The Momentum Style Score helps investors capitalize on price trends by analyzing short-term price changes and earnings estimate revisions [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive rating based on value, growth, and momentum [7] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.83% since 1988, outperforming the S&P 500 [8] - There are typically over 800 top-rated stocks available, making it essential to utilize Style Scores for better stock selection [9] Stock Recommendation: Texas Instruments (TXN) - Texas Instruments is rated 3 (Hold) with a VGM Score of B, and it is highlighted as a potential growth investment with a Growth Style Score of B, forecasting a 17.4% year-over-year earnings growth for the current fiscal year [12] - Nine analysts have raised their earnings estimates for fiscal 2026, with the Zacks Consensus Estimate increasing by $0.35 to $6.40 per share, and TXN has an average earnings surprise of +6.5% [13]

Investment Rating - The semiconductor industry is rated as "Outperform" compared to the market [1] Core Insights - The semiconductor industry is experiencing a comprehensive price increase driven by the accelerated capital expenditures of overseas cloud vendors in 2026, with significant demand from AI servers leading to a shortage in testing capacity and subsequent price hikes across the supply chain [4][8] - In January 2026, the domestic semiconductor industry saw an increase of 18.63%, significantly outperforming the Shanghai and Shenzhen 300 index, which rose by 1.65% [7][13] - Global semiconductor sales continued to grow year-on-year, with a 37.1% increase in December 2025, marking 26 consecutive months of growth [28] Summary by Sections 1. Semiconductor Industry Performance - In January 2026, the semiconductor sector (CITIC) rose by 18.63%, with integrated circuits up by 18.52%, discrete devices by 18.91%, semiconductor materials by 19.04%, and semiconductor equipment by 18.88% [7][13] - The Philadelphia Semiconductor Index increased by 12.92% in January 2026, outperforming the Nasdaq 100, which rose by 1.20% [19][20] 2. Global Semiconductor Sales Growth - December 2025 global semiconductor sales reached approximately $78.9 billion, with a year-on-year growth of 37.1% and a month-on-month increase of 2.7% [28] - The sales of logic products grew by 39.9% year-on-year, reaching $301.9 billion, while memory products saw a 34.8% increase, totaling $223.1 billion [28] 3. Capital Expenditure Trends - The capital expenditures of the four major North American cloud vendors (Google, Microsoft, Meta, Amazon) increased by 67% year-on-year in Q4 2025, with expectations for continued acceleration in 2026 [7][8] - Google is projected to spend between $175 billion and $185 billion in 2026, a year-on-year increase of 91-102% [7] 4. Price Trends in Semiconductor Products - In January 2026, DRAM and NAND Flash spot prices continued to rise, with DRAM prices increasing by approximately 39% and NAND prices by about 35% month-on-month [7] - TrendForce has raised its price forecast for Q1 2026, expecting a 90-95% increase in general DRAM contract prices and a 55-60% increase in NAND Flash contract prices [7] 5. Investment Opportunities - The report suggests focusing on investment opportunities in AI PCB, optical chips, wafer foundries, testing, power devices, server CPUs, and memory sectors due to the ongoing price increases and strong demand driven by AI [8]

Have you evaluated the performance of Texas Instruments' (TXN) international operations for the quarter ending December 2025? Given the extensive global presence of this chipmaker, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth.In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must under ...

Summary of Conference Call Records Industry Overview: Semiconductor and LED Key Points on the LED Industry - The LED industry is experiencing a price increase across the entire supply chain, with over 50 lighting companies announcing price hikes due to raw material shortages and currency fluctuations. Notably, overseas leader Signify announced a price increase of up to 50% for Philips brand products, while domestic leader Opple plans to raise prices by 5%-10% starting March 1, 2026 [2][4] - The price hikes reflect a broader trend in the industry, driven by global supply chain disruptions and rising commodity prices, alongside a shift towards smart and energy-efficient lighting solutions [4] Key Points on Semiconductor Market - The semiconductor market is seeing significant attention on LED driver chips and packaging materials due to high demand and rising precious metal prices. For instance, Taiwan's Changhua Technology announced a 20% price increase for lead frames in Q1 2026, with plans for quarterly adjustments [1][5] - The semiconductor packaging segment is benefiting from strong demand from emerging industries such as AI and new energy vehicles, leading to a high utilization rate of packaging plants and slight price increases from upstream foundries. The global supply of 8-inch wafers is expected to decline by 2.4% year-on-year in 2026, with capacity utilization rising to 85%-90% [6][7] Key Points on Analog Chip Sector - The analog chip sector has seen multiple price increases since 2025, with companies like TI and ADI implementing price hikes. ADI plans a 15% increase across all products starting February 2026, while domestic companies like Richtek are also beginning to raise prices to alleviate cost pressures and improve profit margins [8] Company-Specific Insights: Kangqiang Electronics Performance and Market Position - Kangqiang Electronics, a leading domestic semiconductor packaging materials manufacturer, focuses on lead frames and bonding wires. The company is expected to follow the price increase trend set by major players like Changhua Technology, benefiting from urgent downstream demand and cost transmission from upstream [3][10] - Lead frames account for 15%-25% of packaging material costs, with the Chinese market exceeding 12 billion yuan. The company’s main product areas are stamping and etching, with an expected recovery in utilization rates leading to rapid profit restoration [11] Strategic Initiatives - Kangqiang Electronics implemented its first stock incentive plan at the end of December 2025, reflecting confidence in future market developments and positioning [12] Additional Considerations - The semiconductor packaging materials market is currently at a low price point, but rising supply-side costs are expected to trigger price increases. Channel vendors are likely to stock up ahead of price hikes, which will drive replenishment demand across various segments [9] - The overall trend indicates a potential for further price increases in the semiconductor packaging materials market, which could positively impact the financial performance of companies like Kangqiang Electronics [9][11]

Group 1: Company Overview - Texas Instruments (TXN) has seen its shares rebound to all-time highs, indicating potential for further gains in the context of the AI revolution [1] - The company specializes in analog chips, which convert physical events into digital signals, and are essential in various tech products [2] - Texas Instruments' chips play a crucial role in power management within data centers that support AI infrastructure, suggesting a long-term growth opportunity as AI development continues [4] Group 2: Growth and Investment - The analog chip sector has faced challenges in recent years, but Texas Instruments is investing in new production capacity and has agreed to acquire competitor Silicon Labs [5] - The company has restructured its reporting to highlight its data center business, which accounted for approximately 9% of total revenue and experienced a 64% year-over-year growth in the fourth quarter [6] - Despite the nascent nature of the AI opportunity, revenue from the data center segment rose by a mid-single-digit percentage from the previous quarter, indicating potential for significant growth in the analog chip sector [8] Group 3: Market Position and Future Outlook - Texas Instruments is recognized as a leader in the analog chip market, positioning itself for long-term success despite competition from other chipmakers [9] - The ongoing AI buildout could elevate Texas Instruments to a top-performing chipmaker by 2027, driven by the strength of its business and growth initiatives [9]

Revenue and Profit - Revenue for 2025 was $17.68 billion, an increase of $2.04 billion or 13.0% compared to 2024, driven by higher demand in the Analog segment [110]. - Gross profit for 2025 was $10.08 billion, up $989 million or 10.9%, with a gross profit margin of 57.0%, down from 58.1% [111]. - Operating profit for 2025 was $6.02 billion, or 34.1% of revenue, compared to $5.47 billion or 34.9% in 2024 [113]. - Embedded Processing revenue increased by 6% to $2.70 billion, while operating profit decreased by 14% to $304 million due to higher costs [118]. - Analog segment revenue increased by 15% to $14.01 billion, with operating profit rising by 17% to $5.41 billion [117]. - Revenue for 2025 reached $17,682 million, a 13% increase from $15,641 million in 2024 [130]. Cash Flow - Cash flow from operations was $7.15 billion, an increase of $835 million, representing strong operational performance [122]. - Free cash flow for 2025 was $2.94 billion, accounting for 16.6% of revenue [106]. - Cash flow from operations (GAAP) for 2025 was $7,153 million, up from $6,318 million in 2024, representing a 13.2% increase [130]. - Free cash flow (non-GAAP) increased to $2,938 million in 2025, compared to $1,498 million in 2024, marking a 96.5% growth [130]. - Cash flow from operations as a percentage of revenue (GAAP) was 40.5% in 2025, slightly up from 40.4% in 2024 [130]. - Free cash flow as a percentage of revenue (non-GAAP) improved to 16.6% in 2025 from 9.6% in 2024 [130]. - The company received $335 million from CHIPS Act incentives in 2025, contributing to its cash flow [130]. Capital Expenditures and Acquisitions - The company plans to spend approximately $2 billion to $3 billion in capital expenditures for 2026, down from a six-year elevated cycle [124]. - The company announced an agreement to acquire Silicon Labs for $231.00 per share, totaling an enterprise value of approximately $7.5 billion, expected to close in the first half of 2027 [127]. Currency and Interest Rate Risks - A hypothetical 10% fluctuation in non-U.S. currency exchange rates could result in a pretax currency exchange gain or loss of approximately $5 million [136]. - As of December 31, 2025, the company had forward currency exchange contracts with a notional value of $675 million to hedge net balance sheet exposures [137]. - A hypothetical 100 basis point increase in interest rates would decrease the fair value of cash equivalents and short-term investments by about $11 million [139]. - The fair value of long-term debt would decrease by $969 million due to a 100 basis point increase in interest rates, although cash flows associated with long-term debt remain unaffected [139].

Summary of Texas Instruments (TI) Acquisition of Silicon Labs Conference Call Company and Industry Overview - **Company Involved**: Texas Instruments (TI) and Silicon Labs - **Industry**: Embedded wireless connectivity solutions Core Points and Arguments 1. **Acquisition Announcement**: TI announced the acquisition of Silicon Labs, a leader in embedded wireless connectivity, which is expected to enhance TI's embedded processing strategy and global leadership in wireless connectivity solutions [3][4][13] 2. **Strategic Importance**: The acquisition adds 1,200 products to TI's portfolio, supporting various wireless connectivity standards, and is seen as timely due to the fast-growing demand for connected devices [4][10] 3. **Financial Expectations**: TI anticipates annual manufacturing and operational synergies exceeding $450 million within three years post-acquisition, with the transaction expected to be accretive to earnings per share in the first full year [5][11] 4. **Cultural Fit**: Both companies share a high-performing culture and a commitment to engineering excellence, which is expected to facilitate integration and innovation [4][6] 5. **Growth Potential**: Silicon Labs has achieved a 15% revenue CAGR since 2014, and TI expects to leverage its manufacturing capabilities and market reach to accelerate growth further [4][10] Additional Important Content 1. **Manufacturing Synergies**: TI's manufacturing capabilities, including low-cost 300-millimeter wafer fabs, will allow for the transition of Silicon Labs' manufacturing in-house, enhancing supply assurance for customers [11][12] 2. **Funding the Acquisition**: The acquisition will be funded through cash on hand and approximately $7 billion in additional debt, while TI remains committed to returning 100% of free cash flow to shareholders [12][51] 3. **Regulatory Approval Timeline**: The transaction is expected to close in the first half of 2027, pending regulatory and shareholder approvals [12][33] 4. **Market Positioning**: TI's existing wireless connectivity business is growing, albeit slower than Silicon Labs', and the acquisition is expected to enhance TI's position in the industrial market, which constitutes a significant portion of Silicon Labs' revenue [29][62] 5. **Cross-Selling Opportunities**: There are expectations for cross-selling opportunities between TI's and Silicon Labs' product lines, particularly in power management and sensing solutions [57][60] Conclusion The acquisition of Silicon Labs by Texas Instruments is positioned as a strategic move to enhance TI's capabilities in embedded wireless connectivity, with significant expected synergies and growth potential. The integration is anticipated to leverage both companies' strengths, ultimately benefiting shareholders and customers alike.

1 Place the path to any images place on the background here #1 #A40000 #2 #CC0000 #3 #EE0000 #4 #55555 A leader in embedded wireless connectivity with breadth and depth across products, technology and customers Significant opportunity across diverse customer base with ~15% revenue CAGR since 2014 Utilizes TI's industry-leading, dependable, low-cost manufacturing capacity to better serve customers #5 #9BD7FF #6 #007C8C 1 DRAFT TI CONFIDENTIAL – MAXIMUM RESTRICTIONS PRIVILEGED Strategically and financially co ...