And no, Texas Instrument doesn’t just build calculators for high school and math class. The company is above all the world leader in analog chips, between 17% and 20% of the market. As much in shortage as digital semiconductors, the valuation of the Dallas-based company since 1930 suffers. It reaches 170 billion dollars.
Don’t overlook the importance of analog semiconductors
Since the onset of the semiconductor shortage, much of the focus has been on digital chipmakers TSMC, Samsung and Intel. Yet analog chips, which process incoming training on temperature, sound or electric currents, are in the same situation, reports the Wall Street Journal.
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The most efficient chips are even in the minority in a high-end smartphone, four or five maximum, out of fifty. The analog chips produced by Texas Instrument, but also the German Infineon Technologies or the Franco-Italian STMicroelectronics, are used for managing battery charging, for example.
In November, during the financial results revelation, Taiwanese computer maker Asustek Computer revealed that its assembly lines were being disrupted by a lack of supplies from an unnamed American company, most likely Texas Instrument. Apple partly explains its difficulty in producing some of its flagship products, such as the iPhone, for lack of analog chips for its production process.
In October Rafael Lizardi, chief financial officer of Texas Instrument, admitted, “ It is clear that our stocks are well below what we want “. According to the specialist research firm TrendForce, cited by the Wall Street Journal, the order book for manufacturers of analog chips for the automotive industry is full until the end of 2022.
Texas Instrument is used to market fluctuations
Like TSMC, Samsung and Intel, the company has put tens of billions of investments on the table. A new $ 6 billion plant is slated to rise from the ground in Texas in the second half of 2022. Construction of two more is slated to begin in the state the same year. Rich Templeton, CEO of Texas Instrument, calls for reason, “ You can’t change your production capacity substantially in a year or two “.
Despite these impressive figures, Texas Instrument and its counterparts are more timid when it comes to investments. The analog chip market has traditionally alternated cycles of overproduction and scarcity. In the meantime, the economic situation is particularly favorable to them, with prices increasing and the valuation that follows.