Texas Instruments Demand for automotive chips remains strong

Texas Instruments: Demand for automotive chips remains strong

The American company Texas Instruments supplies semiconductor components for a wide range of electronic devices and household appliances, so its quarterly report could serve as another example of what is happening in the industry. In the consumer sector, demand has fallen, but the automotive industry is still happy about this chip supplier.

    Image source: Texas Instruments

Image source: Texas Instruments

For starters, the company ended the second quarter with revenue of $5.21 billion versus $4.65 billion the market was expecting after growing it by 14%. In the current quarter, Texas Instruments expects a profit of $4.9-5.3 billion, which is higher than the mid-range market’s expectations ($4.98 billion). The second quarter was not homogeneous in terms of dynamics, as the company’s activities in April were significantly affected by lockdowns in China, but sales volumes increased noticeably in May and June after the corresponding restrictions were lifted in China.

Like last quarter corresponding Representatives from Texas Instruments said that the current high demand for components for automobiles and industrial equipment will remain, but the consumer electronics segment will show weakness. The company’s automotive sales rose more than 20% in the second quarter. The manufacturer still cannot fully meet the demand for some types of semiconductor products.

The company manufactures about 80% of its semiconductor products in-house and will continue to expand its manufacturing base in the future. The proportion of in-house products will only increase in the future, as the experience of competitors has convinced the management of Texas Instruments that the high reliance on contractors during the pandemic has become serious problems for chip suppliers.

In the near future, the company intends to invest further in the expansion of the production of industrial and automotive chips, regardless of the current general economic conditions. Texas Instruments management does not rule out the possibility that the company will face a recession in the future, but does not undertake to accurately predict the timing. Chief Financial Officer Rafael Lizardi stated: “It can happen this year, next year and even 2025. We will fight the recession when the time comes.”. Generally, the upbeat forecast for the momentum of industry development helped the company’s stock price rise 2.6% after the close.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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