Texas Instruments Conference Call Summary Company Overview - **Company**: Texas Instruments (NasdaqGS:TXN) - **Date**: December 02, 2025 Key Points Industry Recovery and Growth - Texas Instruments is experiencing a recovery in 2025, with a projected growth rate of approximately **13%** at the midpoint for the year, following a period of zero growth in Q4 2024 [3][4][5] - The recovery is characterized by double-digit growth in several quarters, although Q3 saw a slight step down [3][4] - The overall market recovery is described as moderate, with uncertainty still prevalent [4] End Markets Performance - **Industrial and Automotive Markets**: Together, they account for about **70%** of Texas Instruments' business, with industrial showing a more significant recovery in double digits, while automotive is growing in single digits [6][7] - The automotive market is stable, with revenue levels returning to those of 2022 and 2023, indicating potential for further growth due to increasing content in vehicles, including EVs [8][9] - The data center market is emerging as a significant area of growth, currently valued at around **$1.2 billion** and expected to grow at a rate exceeding **50%** [10][13] Financial Management and CapEx - Texas Instruments is managing its inventory levels effectively, having reached desired inventory levels by the end of Q3 2025 [17][19] - CapEx for 2025 is projected at **$5 billion**, with expectations to reduce it to between **$2 billion and $3 billion** in 2026, depending on revenue performance [20][23] - The company emphasizes free cash flow management, aiming to return **100%** of cash flow to shareholders [55] Market Position and Competition - Texas Instruments is focused on regaining market share in the analog segment, having lost approximately **400 basis points** from its peak but gaining back **150 basis points** this year [34][35] - The embedded segment has seen a gradual share loss since 2017, attributed to strategic shifts in R&D focus [37][39] - The company is optimistic about future growth in both analog and embedded markets, with a commitment to rebuilding its embedded business [40][41] Geopolitical Considerations - Texas Instruments maintains a diversified manufacturing footprint, with operations in the U.S., China, Europe, and Japan, allowing flexibility in supply chain management amid geopolitical tensions [26][28] - The company views the Chinese market as an opportunity, reporting a **30%** year-to-date growth in its business there [29] M&A Strategy - Texas Instruments is open to M&A opportunities that align with its strategic goals, particularly in analog mixed-signal areas, while continuing to prioritize organic growth [49][52] Share Buybacks - The company has been aggressive in returning capital to shareholders, with potential for increased share buybacks as free cash flow improves [55][56] Future Outlook - Texas Instruments anticipates a record free cash flow year in 2026, with a target range of **$8 billion to $12 billion**, depending on market conditions [57][59] Additional Insights - The company is focused on internalizing its assembly and test capacity, aiming for **95%** internalization by the end of the decade [25] - Texas Instruments is committed to maintaining a competitive edge in the fast-evolving semiconductor market, emphasizing the importance of agility and customer service [32][33]

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