Texas Instruments reported second quarter revenue of $4.58 billion, a 41% increase over a year ago on strong demand for industrial, auto and personal electronics.
TI’s industrial market revenues jumped about 40% over the prior year quarter, while auto more than doubled over a weak quarter in 2020 when COVID-19 began to have a strong impact on auto sales globally. Personal electronics jumped about 25% over the prior year quarter.
The chip company didn’t report the dollar value for auto revenue, but Statista has reported TI had more than 21% in auto revenues for all of 2020 when the Dallas-based company reached $14.4 billion in total revenues. That would put its auto revenues in 2020 at $2.9 billion.
TI is one of the top five auto chipmakers globally with about 8.3% of the total market that reached $35 billion globally in 2020, Statista said. The other big producers of auto chips are Renesas, NXP, Infineon, and STMicroelectronics. Those five comprise about half of the total auto chip market.
TI also said it saw growth in its Analog business of 42% to $3.4 billion and Embedded of 43% to $780 million year-over-year for the quarter.
Chief Financial Officer Rafael Lizardi said TI is on track to expand its fabrication capabilities with its RFAB2 fab in Dallas coming online soon and its June 30 purchase of the Lehi, Utah, fab from Micron for $900 million. Both will make 300 mm wafers, for a total of four 300 mm fabs TI owns.
TI said at the time the Lehi acquisition will start with 65 nm and 45 nm chip production for analog and embedded processing products.
“We continue to believe that our competitive advantage of manufacturing and technology will be of growing importance in owning and controlling our supply chain,” Lizardi told analysts in Wednesday’s conference call, according to a transcript from The Motley Fool.
He predicted overall third quarter TI revenue will be $4.4 billion to $4.76 billion.
Lizardi said the Lehi fab purchase and the RFAB2 fab will increase the company’s capacity in about a year. “It will be a while before we have big tranches of capacity coming online,” he said. So far the company has been adding capacity “incrementally,” he said. “At the end of day, we don’t fully control there. It is more of a macro situation, but we are better prepared than our peers and have been in both the tactical decisions we have made during the pandemic.”
Owning TI’s manufacturing capability “has been a key in this whole process and we’re just really doubling down on that,” Lizardi added.
TI stock declined after its earnings announcement to $185.74 first thing Thursday following its late Wednesday announcement when the price closed at $194.24.
Some analysts and industry officials are now saying the global auto chip shortage will last until 2023 then lead to an oversupply in 2024. Analyst Dan Hutcheson at VLSI Research believes chip shortages for a variety of products are nearly ended except for auto.
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