Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>Demand for Auto &amp; Industrial Semis was weak in 2024, Semi inventories remain high. But TXN beats 1Q guidance handsomely, 2Q is above expectations. TXN is back to YoY growth.</li>
<li>Critically, the Industrial market is recovering rapidly, Auto is back to modest growth. Management has some concerns that there could be re-stocking ahead of US import tariffs. </li>
<li>Consensus is too low but the stock is not cheap, has deflated from bubble levels but still not cheap.</li>
</ul>


Demand for Auto &amp; Industrial Semis was weak in 2024, Semi inventories remain high. But TXN beats 1Q guidance handsomely, 2Q is above expectations. TXN is back to YoY growth.
Critically, the Industrial market is recovering rapidly, Auto is back to modest growth. Management has some concerns that there could be re-stocking ahead of US import tariffs. 
Consensus is too low but the stock is not cheap, has deflated from bubble levels but still not cheap.


Texas Instruments: Surprisingly Good 1Q25, Good 2Q Guidance. End-Markets Are Back to YoY Growth.

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

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Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Texas Instruments recently presented their fourth-quarter earnings, offering insights into the performance and outlook of the company.</li><li>The financial results indicate both challenges and opportunities for investors to consider.</li><li>In the fourth quarter of 2024, Texas Instruments reported revenue of $4 billion, which marks a 3% sequential decrease and a 2% decline from the previous year.</li></ul>

Texas Instruments recently presented their fourth-quarter earnings, offering insights into the performance and outlook of the company.The financial results indicate both challenges and opportunities for investors to consider.In the fourth quarter of 2024, Texas Instruments reported revenue of $4 billion, which marks a 3% sequential decrease and a 2% decline from the previous year.

Texas Instruments: The 7 Most Significant Forces Steering Its Performance into 2025 & Beyond! - Major Drivers

<ul>
<li>Revenues are hitting the bottom in 1Q25, most firms mention sequential growth in 2Q, sometimes YoY growth. Trends depend on specific firms, mentions of both Auto and Industrial recovering.</li>
<li>Gross / operating profit recovery could take a bit longer as inventory and price concessions could negate revenue growth for a couple of quarters.</li>
<li>2 categories of stocks: the cheap ones (NXP, Onsemi, Renesas, STMicro) and the expensive stocks (Analog Devices, Infineon, Microchip, Texas Instruments). I’d go with Renesas and Texas Instruments.</li>
</ul>


Revenues are hitting the bottom in 1Q25, most firms mention sequential growth in 2Q, sometimes YoY growth. Trends depend on specific firms, mentions of both Auto and Industrial recovering.
Gross / operating profit recovery could take a bit longer as inventory and price concessions could negate revenue growth for a couple of quarters.
2 categories of stocks: the cheap ones (NXP, Onsemi, Renesas, STMicro) and the expensive stocks (Analog Devices, Infineon, Microchip, Texas Instruments). I’d go with Renesas and Texas Instruments.


Automotive & Industrial Semiconductors Part 2: Is It the Bottom, Finally? Time to Buy?

Thematic (Sector/Industry)

<ul>
<li>Auto &amp; Industrial Semi long boom / bust cycle started during Covid (peak demand) and is ending soon. Revenues declined by -20%. Operating Profits are depressed, down -50% from peak.   </li>
<li>Industry structure, high fragmentation, low transparency led to a protracted and steep bottom. But inventories remain high. The recovery will take time, probably no YoY revenue growth till 2026.   </li>
<li>Two big restructuring are underway, the sector is rationalizing. Lofty expectations of “structural growth” (EV, ADAS, green energy growth) hit the wall of a disappointing reality amplified by trade wars.</li>
</ul>


Auto &amp; Industrial Semi long boom / bust cycle started during Covid (peak demand) and is ending soon. Revenues declined by -20%. Operating Profits are depressed, down -50% from peak.   
Industry structure, high fragmentation, low transparency led to a protracted and steep bottom. But inventories remain high. The recovery will take time, probably no YoY revenue growth till 2026.   
Two big restructuring are underway, the sector is rationalizing. Lofty expectations of “structural growth” (EV, ADAS, green energy growth) hit the wall of a disappointing reality amplified by trade wars.


Auto & Industrial Semi Part1: Background of the Ongoing Crash, Revising Down Lofty Expectations

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

<ul>
<li>August's WSTS semiconductor revenues registered a record high of more than $53 billion</li>
<li>Nobody seemed to notice, including the organization making the announcement</li>
<li>There's valid concern that the market is on the verge of a collapse, and this may be overshadowing record sales</li>
</ul>


August's WSTS semiconductor revenues registered a record high of more than $53 billion
Nobody seemed to notice, including the organization making the announcement
There's valid concern that the market is on the verge of a collapse, and this may be overshadowing record sales


Semis Just Broke a Record.  Why Did Nobody Notice?

United States

Texas Instruments Incorporated operates as a semiconductor design and manufacturing company. The Company develops analog ICs and embedded processors. Texas Instruments has manufacturing or sales operations worldwide.

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Texas Instruments (TXN US)

Texas Instruments: Surprisingly Good 1Q25, Good 2Q Guidance. End-Markets Are Back to YoY Growth.

After weak demand for Auto & Industrial Semis in 2024, TXN beats 1Q guidance and is back to YoY growth. However, concerns about re-stocking ahead...

Nicolas Baratte

Texas Instruments: The 7 Most Significant Forces Steering Its Performance into 2025 & Beyond! - Major Drivers

Texas Instruments recently presented their fourth-quarter earnings, offering insights into the performance and outlook of the company. The...

Baptista Research

Automotive & Industrial Semiconductors Part 2: Is It the Bottom, Finally? Time to Buy?

1Q25 revenues hitting bottom, firms see QoQ growth in 2Q. Auto and Industrial show signs of improvement. Profit recovery may lag (inventory, price...

Nicolas Baratte

Auto & Industrial Semi Part1: Background of the Ongoing Crash, Revising Down Lofty Expectations

Auto & Industrial Semi close to end of long boom/bust cycle, with revenues down -20%. Recovery expected to be slow with no YoY growth till 2026....

Nicolas Baratte

Semis Just Broke a Record. Why Did Nobody Notice?

August's semiconductor revenues hit a record high of over $53 billion, but concerns about a potential market collapse are overshadowing the...

Jim Handy

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52-week Range

Market Cap (USDm)

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Texas Instruments: Surprisingly Good 1Q25, Good 2Q Guidance. End-Markets Are Back to YoY Growth.

​After weak demand for Auto & Industrial Semis in 2024, TXN beats 1Q guidance and is back to YoY growth. However, concerns about re-stocking ahead...

Nicolas Baratte

Texas Instruments: The 7 Most Significant Forces Steering Its Performance into 2025 & Beyond! - Major Drivers

Texas Instruments recently presented their fourth-quarter earnings, offering insights into the performance and outlook of the company. The...

Baptista Research

Automotive & Industrial Semiconductors Part 2: Is It the Bottom, Finally? Time to Buy?

​1Q25 revenues hitting bottom, firms see QoQ growth in 2Q. Auto and Industrial show signs of improvement. Profit recovery may lag (inventory, price...

Nicolas Baratte

Auto & Industrial Semi Part1: Background of the Ongoing Crash, Revising Down Lofty Expectations

​Auto & Industrial Semi close to end of long boom/bust cycle, with revenues down -20%. Recovery expected to be slow with no YoY growth till 2026....

Nicolas Baratte

Semis Just Broke a Record. Why Did Nobody Notice?

​August's semiconductor revenues hit a record high of over $53 billion, but concerns about a potential market collapse are overshadowing the...

Jim Handy

After weak demand for Auto & Industrial Semis in 2024, TXN beats 1Q guidance and is back to YoY growth. However, concerns about re-stocking ahead...

1Q25 revenues hitting bottom, firms see QoQ growth in 2Q. Auto and Industrial show signs of improvement. Profit recovery may lag (inventory, price...

Auto & Industrial Semi close to end of long boom/bust cycle, with revenues down -20%. Recovery expected to be slow with no YoY growth till 2026....

August's semiconductor revenues hit a record high of over $53 billion, but concerns about a potential market collapse are overshadowing the...