Texas Instruments sales drop 3% to $4.67 bn in Dec quarter

Texas Instruments has reported revenue of $4.67 billion (–3 percent), net income of $1.96 billion and earnings per share of $2.13 for the fourth quarter of 2022.
Texas Instruments chip business
“Our results reflect weaker demand in all end markets with the exception of automotive,” Rich Templeton, chairman, president and CEO of Texas Instruments, said.

Rich Templeton will step down from the role in April. Haviv Ilan will become next president and CEO of Texas Instruments on April 1.

Texas Instruments, a leading semiconductor company, has generated 40 percent of sales from industrial, 25 percent from automotive, 20 percent from personal electronics, 7 percent from communications equipment, and 6 percent from enterprise systems in 2022.

In 2022, industrial and automotive combined accounted for 65 percent of TI’s revenue, up about three percentage points from 2021.

“We see opportunities in all of our markets, but we place additional strategic emphasis on industrial and automotive. Our industrial and automotive customers are increasingly turning to analog and embedded technology to make their end products smarter, more connected and more efficient. These trends have resulted and will result in growing chip content per application, which will drive faster growth,” Texas Instruments CFO Rafael Lizardi said.

Texas Instruments, which sells processing chips for markets such as industrial, automotive, personal electronics, communications equipment and enterprise systems, invested $3.4 billion in R&D and SG&A, and $2.8 billion in capital expenditures over the past 12 months.

Order cancellations rose during the fourth quarter, head of investor relations Dave Pahl told analysts in an earnings call.

The company said it expects weaker than seasonal decline in demand during the current quarter as customers preferred to reduce their inventory pile. Texas Instruments expects revenue of $4.17 billion to $4.53 billion in the first quarter.

“TI’s results show that even the more resilient analog markets are beginning to show weakness,” Edward Jones analyst Logan Purk said.

Summit Insights Group analyst Kinngai Chan said orders in the automotive market have begun to moderate but haven’t turned negative yet. “We believe this order moderation is a result of the easing supply chain.”