Texas Instruments reported strong demand from industrial and auto markets for its chips, leading to a 19% surge in revenues in the fourth quarter over a year ago.
Revenue increased broadly across all markets, executives said. In an earnings call Tuesday, they described a strong record of serving customers throughout the pandemic despite widespread industry chip shortages that have especially hurt the auto industry.
“Our team has done a good job supporting customers across all end markets," said Dave Pahl, head of investor relations. Revenues grew 40% from pre-pandemic in fourth quarter 2019 to first quarter of 2021, he noted. TI has a “strategic program in auto and industrial that will help for years ahead.”
Fourth quarter 2021 revenues were $4.83 billion, with net income of $2.14 billion and earnings of $2.27 per share. Analog revenue grew 20% and embedded processing revenue grew 6%, the company said on Tuesday.
The company’s outlook for first quarter 2022 is revenue of up to $4.9 billion.
CFO Rafael Lizardi predicted capital expenses, which were $1.2 billion in the fourth quarter, will go up and continue to grow with investments in expanding fab operations that are happening now. Those investments “will grow the top line and have great follow throughs over a long time,” he said.
TI has operations expansions in facilities in various countries that “will always be ahead of demand,” he said. “We have been and will bring capacity incrementally in relatively small steps that will make a difference on a cumulative basis,” Lizardi said.
The company is expected to see more dramatic upticks in fabrication capability when it completes a fab known as RFAB2 in Richardson, Texas, later in 2022 and brings on a a 300 mm wafer fab in Lehi, Utah, in early 2023. It will be TI’s fourth 300 mm wafer fab.
In October, Lizardi said the RFAB2 will cost about $6 billion, with Lehi costing $900 million in a purchase from Micron with another $3 billion of capital expense put in. Further details are expected at a TI Capital Management seminar on Feb. 3.
Wafer production is considered the primary bottleneck in the chip shortage, according to Commerce Department officials on Tuesday. The chip supply chain overall remains in a "fragile" state, officials said.
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TI makes more auto-related chips than any other U.S.-based chip supplier. Globally, it is roughly tied with Renesas in third place in the auto sector, behind Infineon and NXP in first and second place. TI has about 8% of a global auto chip market that reached more than $35 billion in 2020, according to Statista.
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