Texas Instruments (TXN.US) Chief Financial Officer Rafael Lizardi issued a warning at the Citi TMT conference, stating that the recovery pace of semiconductor demand has not been as rapid as some had anticipated. Lizardi commented during the conference: "This hasn't quite happened the way some people expected it to, and it's not like other recoveries." Texas Instruments did not immediately respond to requests for comment on these remarks.
Texas Instruments expects that four of the five end markets it serves are experiencing comprehensive recovery, but the automotive market remains an exception, with its recovery process being relatively slow. The company added that this recovery is not a sharp rebound but rather steady progress, with long-term growth opportunities present in industrial, automotive components, enterprise, and data center sectors.
The company noted that the automotive industry remains the slowest recovering sector, possibly affected by macroeconomic uncertainties. However, from a long-term perspective, growth in the automotive industry is expected to expand the company's total addressable market (TAM).
Operationally, Texas Instruments has maintained low delivery cycles through design advantages, fully leveraging its catalog-based business model, higher internal manufacturing efficiency, and reliance on distributors. Last quarter, its inventory days were approximately 21 to 25 days, consistent with expected revenue conditions.
Vice President and Head of Investor Relations Mike Beckman pointed out that the entire industry and global shipments are recovering, but "there may be differences from historical cycle speeds."
Regarding capital expenditure, Texas Instruments continues to maintain high levels, approximately $5 billion in 2025, sustaining this level for three consecutive years, focusing on multi-year phased expansion in the United States and modular expansion to meet market demand. The company stated that if revenue is at the low end of guidance, capital expenditure is expected to be between $2 billion and $3 billion by 2026, with the $2 billion floor used to complete ongoing projects.
Additionally, Texas Instruments noted that the company has received support from the CHIPS Act and expects to receive approximately $6 billion to $9 billion in support from investment tax credits, with more substantial benefits due to the current 35% investment tax credit (ITC) rate. The company also clearly stated that there are currently no plans to acquire government equity.
In terms of pricing strategy, Texas Instruments regularly adjusts based on market conditions and noted that long-term benchmark scenarios assume price declines in the low single digits, ranging between 2% and 3%.
As of Thursday's close, Texas Instruments stock fell approximately 5%, closing at $187.29.