Texas Instruments Incorporated (TXN) Capital Management Off-Cycle Call (Transcript)

Key Points Industry/Company - Company: Texas Instruments Incorporated (NASDAQ: TXN) - Industry: Semiconductor Core Points and Arguments - Strategic Focus: TI is focusing on Analog and Embedded Processing products, with a strong emphasis on industrial and automotive markets. - Growth Expectations: TI expects to grow its revenue and market share in the next decade, driven by increasing semiconductor content in industrial and automotive applications. - Capacity Investments: TI is investing in 300-millimeter wafer fabs to meet customer demand and ensure geopolitical reliability. - Capital Allocation: TI plans to spend approximately $5 billion in CapEx per year through 2025, with a range of$2 billion to $5 billion in 2026, depending on revenue. - **Free Cash Flow**: TI aims to achieve free cash flow per share growth across a range of market conditions, driven by revenue growth and a scalable CapEx strategy. Other Important Points - **CHIPS Act Funding**: TI has signed a preliminary agreement with the U.S. Department of Commerce for up to$1.6 billion in proposed direct funding under the CHIPS and Science Act, which will help fund the construction of SM1, LFAB2, and SM2. - Investment Tax Credit: TI expects to receive an estimated $6 billion to$8 billion in investment tax credit, which will further support its capacity investments. - Market Recovery Scenarios: TI has provided four revenue scenarios for 2026, representing a range of market conditions, including rapid market recovery, zero growth, and persistently weak market. - Competitive Advantage: TI's competitive advantages include its broad portfolio of Analog and Embedded Processing products, manufacturing and technology foundation, and strong customer relationships. - Geopolitical Dependability: TI is investing in capacity to ensure geopolitical dependability for its Analog and Embedded Processing semiconductors. Key Metrics - Revenue: $20 billion to$26 billion in 2026 - CapEx: $2 billion to$5 billion in 2026 - Free Cash Flow per Share: $8 to$12 in 2026 - Internal Wafer Sourcing: More than 90% by 2026, with more than 95% by 2030 - Assembly Internal: More than 85% by 2026 References - [1] - [5] - [6] - [8] - [10] - [11] - [12] - [13] - [14] - [15] - [16] - [17] - [18] - [19] - [20] - [21] - [22] - [23] - [24] - [25] - [26] - [27] - [28] - [29] - [30] - [31] - [32] - [33] - [34] - [35] - [36] - [37] - [38] - [39] - [40] - [41] - [42] - [43] - [44] - [45] - [46] - [47] - [48] - [49] - [50] - [51] - [52] - [53] - [54] - [55] - [56] - [57] - [58] - [59] - [60] - [61] - [62] - [63] - [64] - [65] - [66] - [67] - [68] - [69] - [70] - [71] - [72] - [73] - [74] - [75] - [76] - [77] - [78] - [79] - [80] - [81] - [82] - [83] - [84] - [85] - [86] - [87] - [88] - [89] - [90] - [91] - [92] - [93] - [94] - [95] - [96] - [97] - [98] - [99] - [100] - [101] - [102] - [103] - [104] - [105] - [106] - [107] - [108] - [109] - [110] - [111] - [112] - [113] - [114] - [115] - [116] - [117] - [118] - [119] - [120] - [121] - [122] - [123]