The value of Texas Instruments shoots to $150 billion. The result of a unique position in a scarce chip market.
COVID-19 increased demand for consumer equipment and vehicles. To this day, chip manufacturers are not or hardly able to meet the demand. Smartphones, cars and game consoles are delivered with a delay.
A common cause is a lack of capacity among digital chip manufacturers, including Intel and Samsung. The lack of analog chips is less well exposed. This made Texas Instruments big in recent decades.
While US and European hardware manufacturers are eagerly waiting for chips from factories in Asia, the market there is waiting for Texas Instruments (TI). According to TrendForce research, TI’s share of the analog chip market is between 17 and 20 percent. The largest manufacturer in the world.
The function of analog chips differs from digital chips, but is nevertheless indispensable in the hardware production chain. In an October 2021 Apple report, CEO Tim Cook describes that Apple has more problems with the shortage of analog chips than digital chips. In the same month, Texas Instruments’ stock price peaked at nearly $200, doubling its pre-pandemic price.
Texas Instruments has a luxury problem. The demand for analog chips cannot be kept up with. The construction of new factories has started, but because they could take years to complete, the solution to the shortage remains out of sight.
Moreover, the organization seems to avoid expansion. Although more production capacity could boost the current market value of €150 billion, the demand for analog chips is coming in gusts. According to the Wall Street Journal, Texas Instruments’ management layer says it wants to be cautious about responding to market demand.