If you have walked through an industrial estate, you have surely come across the typical warehouse with the sign “Spare Parts and Bearings (Insert name)”. And it’s easy for you, at that moment, to wonder what the hell a bearing is and how the rest of the businesses are closing, except for ‘Rodamientos Paco’. Well, in the world of technology there is also a ‘Paco Bearings’. Is called Texas Instruments and, in full era of sophisticated chips, artificial intelligence and quantum computingis breaking it with something very specific.
Boring chips.
In short. Companies are in the middle of the results presentation period. In this round, the managers inform their shareholders about the direction of the company, while allowing us to learn about data on upcoming devices or business plans. Texas Instruments usually goes unnoticed in these more ‘techie’ times, but they are finishing up a fiscal year with very positive numbers.
The fourth quarter they closed with 4,420 million and anticipate increasing to 4,680 million in the first quarter. In the last three months, its share value has increased by 18%. Its shares are among the highest among companies in the same sector and, as we said before, the curious thing is that it is doing all this almost silently.
Live outside the hype. You can constantly read information about cutting-edge chips on Xataka. It is true that the current nature of components is marked by the current RAM memory crisis either of SSDsbut the snapdragonthe Apple Silicon, the latest from NVIDIA or AMD It is what usually marks the conversation. They are the most sophisticated and interesting chips, but a coffee maker does not need a chip like that. That’s where Texas Instruments comes into play.
Because calling their chips “boring” is not an exaggeration. They are outside the AI hype, the data centers and the most exciting features because its market is different: sensors, connectivity, controllers. Where are Texas Instruments chips? In routers, smart refrigerators, washing machines, air conditioners, as secondary chips in televisions, in remote controls, in calculators or in smart smoke detectors.
But they not only make chips, but also another series of integrated circuits for wireless communications, signal processing in all types of devices and even sensors that detect tire pressure, engine temperatures or the air conditioning system. Texas Instruments chips and sensors are in… everything. Even in weapons.
An example of a tiny sophisticated chip in the headphone stick… with only 16 KB of RAM. Because you don’t need more
Huge investment. And the company is not sitting idly by with the huge amount of money it is making with its ubiquity strategy. a few days ago, Bloomberg reported on the agreement that Texas Instruments had reached to buy Silicon Labs. Also American, also with ‘boring’ chips that They are inside ‘things’ of all kinds.
The operation is not closed, but the smell of it caused Silicon Labs shares to increase 51% to more than $206. The curious thing? That Texas Instruments is willing to pay more: up to $231 per share to investors. The operation has not been closed, but there is talk of a purchase of 7.5 billion dollars, well above the 4.5 billion that Silicon Labs is “worth.”
Great year ≠ perfect year. All of this is… outrageous, but it indicates something very specific: they are spending a lot of money to reinforce a huge, stable market that goes unnoticed in a time when everything revolves around artificial intelligence and sophisticated technology. The purchase of Silicon Labs, paying such a high premium per share, shows that they know very well what they are getting into and the value of a market in which they are a key player.
But one thing must also be noted: although revenues rose, annual profits did not increase at the same rate. He total invoiced increased by 13%, but as they have also invested more, this increase in costs reduced the profit margin, which “barely” increased by 4.2%, with some quarters being worse than others (in Q4 they fell by 3.5%).
They haven’t had a perfect fiscal year, but there is one thing that is undeniable: they are still the kings of their niche. If we can describe being everywhere as a “niche”.
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