Texas Instruments(NASDAQ) TXN

Texas Instruments Incorporated makes chips that manage power in electronics. These components help cars, machines, and home gadgets work reliably. The company sells these parts to manufacturers around the world.

The Tools Inside Your Electronics

• Analog: Power management and signal measurement chips; generated $4.365 billion in revenue in the second quarter of 2026.
• Embedded Processing: Computing chips that control electronic equipment; accounted for $788 million in revenue in the second quarter of 2026.
• Other: Projector display technology and handheld calculators; generated $310 million in revenue in the second quarter of 2026.

Strategic Moves and Global Growth

• Entered into a definitive agreement in Feb. 2026 to acquire Silicon Labs for approximately $7.5 billion.
• Expected to close in the first half of 2027, this acquisition will expand the company's semiconductor portfolio.
• Invested $3.3 billion in capital expenditures to expand manufacturing capacity during the 12 months ended June 30, 2026.
• Received $630 million in direct funding from the U.S. CHIPS and Science Act for facilities in Texas and Utah.

A Structural Cost Advantage

Texas Instruments owns and operates its own wafer fabrication and assembly facilities across North America, Asia, Japan, and Europe. Producing chips on 300mm wafers reduces manufacturing costs by about 40% compared to smaller 200mm technology.

Key Financial Performance

• Revenue reached $5.46 billion in the second quarter of 2026, up 23% year over year.
• Net income was $1.98 billion in the second quarter of 2026, compared with $1.30 billion in the prior year.
• Free cash flow hit $6.5 billion for the 12 months ended June 30, 2026, up 271% year over year.
• The company returned $5.8 billion to shareholders through dividends and stock repurchases during the 12 months ended June 30, 2026.

Bottom Line

Texas Instruments focuses on growing free cash flow through its specialization in analog and embedded processing products. Its shift toward internal manufacturing on 300mm wafers provides a cost advantage in the cyclical semiconductor market.