Texas Instruments: A leading player in the semiconductor space


Nov. 20 2020, Updated 3:49 p.m. ET

Significant achievements to date

The technology industry is highly competitive and constantly evolving. It’s no wonder that many companies that have ruled this market have also vanished into the ether over time. Meanwhile, its many collaborations and technological innovations have enabled Texas Instruments Incorporated (TXN) to survive and thrive in the technology space for many years.

Indeed, the company is renowned for its significant contributions to technology. In 1954, in collaboration with Industrial Development Engineering Associates, it built the first transistor radio. It filed a patent for the integrated circuit in 1958 and developed the hand-held calculator in 1967. It’s credited with the single-chip microcomputer, built in 1971. And in collaboration with Intel Corporation (INTC), the company produced microprocessors, the patent for which was granted to Texas Instruments in 1973.

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Good returns to shareholders and investors

In 2012, Texas Instruments exited the smartphone and tablet market where it was facing huge competition. Instead, the company decided to focus on its core segments—analog and embedded processing. Restructuring efforts brought about healthy revenues, decent margins, and cash flow generation. As a result, the company’s shares are currently trading at one of many highs. Since 2010, Texas Instruments has generated 125.9% in returns for its shareholders. During the same period, the S&P 500 generated 87.95% in returns.

Microchip announcement led to a steep fall in the share price of the company

In early October 2014, Microchip Technology, Inc. (MCHP) announced that the chip industry would likely see a correction. At the same time, Microchip’s revenues missed its target. This triggered a sell-off of most chip stocks, including Texas Instruments, Intel, Infineon Technologies (IFX), STMicroelectronics NV (STM), and ASML Holding.

The above chart shows how Microchip’s announcement triggered the share fall that affected many semiconductor companies. Texas Instruments’ shares witnessed one of its worst declines, but its 3Q14 results surpassed analyst expectations, providing relief to its investors and shareholders.

To learn more about Microchip’s announcement, please read What to expect in semiconductor stocks this earnings quarter.


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