Texas Instruments Focuses on Automotive and Industrial as Fed Sounds Alarm on Chip Shortage

As Dallas-based Texas Instruments brings additional semiconductor fabs online in North Texas and beyond, the chipmaker will put a “strategic focus” on the automotive and industrial sectors, TI said Tuesday. .

“Our industrial and automotive customers are increasingly turning to analog and in-vehicle technology to make their end products smarter, safer, more connected and more efficient,” said TI Head of Investor Relations David Pahl. , in a call with analysts.

The North Texas chipmaker has seen faster growth in chip demand in these sectors compared to other markets, and the company expects these trends to continue, Pahl said.

TI credits strong demand in these two sectors for its higher-than-expected revenue growth in the fourth quarter and for the full year. Revenue for the year increased 27% year over year for 2021 to $18.34 billion. Industrial and automotive sales collectively accounted for more than 60% of company sales, Pahl said.

TI also said it plans to bring new chip factories online over the next year, including its RFAB2 in Richardson and its LFAB in Lehi, Utah. He sees the extra capacity at these plants helping to meet near-term demand. The recently announced Sherman campus, which could potentially house up to four chip factories, will provide additional capacity for 2025 and beyond, executives said.

The comments from TI executives came after the US Commerce Department released a new survey detailing a shortage of semiconductor chips in the country that is fueling inflation and could cause more disruption at factories.

Demand for semiconductor chips grew 17% between 2019 and 2021, but companies that need to buy these chips to make their products haven’t seen a “proportional” increase in supply, according to The report.

Commerce Secretary Gina M. Raimondo called the findings of the Commerce Department’s report “alarming” in an interview with The New York Times and pushed Congress to pass legislation to increase US competitiveness in the semiconductor industry.

TI announced a potential $30 billion investment in its four-plant Sherman campus in November. It begins construction of the first two factories on the site in 2022 with the possibility of building more in the future if necessary. The company said it expects production to begin at the first plant in 2025.

Texas Instruments is expected to share more details about Sherman’s new plant plans on Feb. 3 in its capital management update.

Samsung is also building a massive $17 billion semiconductor chip factory outside Austin, which has been called the largest foreign direct investment in Texas history.

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