Texas Instruments reported fourth quarter revenue of $4.67 billion and net income of $1.96 billion, representing a revenue decline of 3% from a year earlier.
The results “reflect weaker demand in all end markets with the exception of automotive,” said CEO Rich Templeton in a statement.
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Templeton, who will be replaced as CEO by longtime TI veteran Haviv Ilan on April 1, has long concentrated on cash flow from operations as a key metric on which to measure the company. He noted that metric was $8.7 billion for 2022, with free cash flow at $5.9 billion and 30% of revenue.
This achievement “reflects the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-mm production,” Templeton said.
The company brags about producing 300 mm wafers as 40% less costly to produce than 200 mm wafers in wide use around the industry. Also, TI makes a wide range of products with 90,000 SKUs, giving the company the opportunity to sell many different products to each of its 100,000 customers. And, it operates its own testing at its production facilities, to lower costs.
The company invested $3.4 billion R&D and SG&A in 2022 and another $2.8 billion in capex, including new facilities in Texas and Utah.
Outlook for first quarter 2023 calls for revenues up to $4.53 billion.
Revenues for all of 2022 were $20.028 billion, with net income of $8.7 billion.
Analog chips accounted for the overwhelming majority of products sold in the fourth quarter, totalling about $3.5 billion, a 5% reduction from a year earlier. Analog is heavily used in automotive power trains. Analog was $15.3 billion of the entire 2022 revenue stream, about 75%, which represented a 9% increase over 2021.
For all of 2022, TI said 40% of its revenues came from industrial customers and another 25% from automotive customers. For automotive, revenues jumped 30% in 2022 over the prior year. Trends from the fourth quarter are expected to continue into the current quarter and automotive "continues to be reslient," said Dave Pahl, head of investor relations, on a call with analysts.
Disruptions in China over Covid were not as big a factor in the fourth quarter as in previous quarters, officials said on a call. "As the China economy comes back, it helps the world GDP and us," Pahl said.
TI is cashing in on the CHIPS Act along with other companies and saw $400 million credited in 2022 from the investment tax credit for construction of chip fabs in the US. Chief Financial Officer Rafael Lizardi said the company is also working to apply for direct government grants under the CHIPS Act by Feb. 1, but did not offer any specifics. He and other officials will hold a capital spending webcast on Feb. 2 at 10 a.m. central time.