Texas Instruments hopes chip demand will return to growth soon

Texas Instruments’ revenue has fallen for eight consecutive quarters, highlighting the post-pandemic stock-out problem typical of some segments of the semiconductor market. Texas Instruments products, according to management, will soon begin to attract buyers to a greater extent, although in some segments past reserves have not yet been depleted.

Image source: Texas Instruments

As Texas Instruments CEO Haviv Ilan explained at the last quarterly conference, in the three market segments in which the company represents its products, demand has already begun to revive, but the largest sources of revenue in the form of the industrial and automotive electronics segment are still showing an overstocking of warehouses with chips . Texas Instruments’ quarterly report disappointed investors with its revenue forecast for the current quarter, causing the company’s stock price to fall nearly one percent.

While analysts had forecast revenue for the current quarter at $4.08 billion on average, Texas Instruments’ own forecast was below that mark, in the range of $3.7 to $4 billion. Specific earnings per share were also lower, ranging from $1.07 to $1.29 average forecast of $1.35. However, the optimistic mood of the company’s management was transmitted to investors after the close of trading, as Texas Instruments shares later rose in price by about 3%.

The company also ended the last quarter with a decrease in revenue, like the previous seven. The drop reached 8.4%, the manufacturer reported revenue of $4.15 billion. However, it still turned out to be slightly higher than analysts’ expectations, as was specific earnings per share – $1.47 versus $1.37. About 70% of Texas Instruments’ revenue comes from the industrial and automotive electronics segment, and they are not yet ready to demonstrate a revival in demand. The company spends a lot of money on building new plants. While this reduces its profits in the short term, in the long term it should allow it to gain a cost advantage over its competitors.