Texas Instruments Incorporated (NASDAQ:TXN) recently increased its revenue target from $2.69 – $2.91 billion to $2.80 – $2.91 billion, owing to better demand. Earlier, the company had complained of “weak demand” and tepid conditions in the Chinese and European economies. Furthermore, it exited the smartphone business and decided to wrap it up as early as Q2 2013.
Recently Texas Instruments Incorporated (NASDAQ:TXN) left the mobile business, and its CEO had this to say: “It’s that if you don’t think the movie’s going to end well, don’t stick around, okay, because it’s probably not if you’ve got that confidence.” TI is mainly a semiconductor manufacturing company with a formidable presence in the analog market.
With its entry in the mobile processor market, TI had thought of tapping the booming smartphone space. But things did not turn out well. Two of the major mobile device manufacturers, Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co., Ltd. (KRX:005930) have in-house chip designing facilities. Besides this, TI couldn’t stand a chance against the likes of NVIDIA and the mobile chip king, QUALCOMM, Inc. (NASDAQ:QCOM). And though it may have hurt margins, I’d say it was a rather good decision by TI.
So what’s next for Texas?
Well, the Dallas-based company is going heavily into analog and embedded chips which highlights a shift towards industrial products with long gestation periods. This is the reason why TI has been investing money for a long time in the acquisition of National Semiconductor. This is, in a way, following QUALCOMM, Inc. (NASDAQ:QCOM), which, after its acquisition of Atheros Communications cemented a strong presence in the wireless segment.
But unlike Texas Instruments Incorporated (NASDAQ:TXN), Qualcomm seems to be diving further into the smartphone arena with a rather interesting tie-up with one of Vietnam’s largest multinational companies – The FTP Group. The venture aims at introducing the first indigenously manufactured smartphone in Vietnam, which would be available for as little as $50. Not exactly a thing that would drive margin growth, but that’s Qualcomm’s problem.
Texas Instruments Incorporated (NASDAQ:TXN) is eyeing automotive as one of the major propellers of growth. The idea is to make smarter cars and make more cars smart. It is notable to mention STMicroelectronics N.V. (ADR) (NYSE:STM) here, whose strategies are focused towards segments such as Sensors, Imaging, MCUs, standard logic, and display drivers, which again is a field with a growing market.
This company has made important innovations in the field of power management, imaging, and security. STMicroelectronics’ efforts have now placed it amongst major wireless players in segments with growth projections of almost 17% over the next four years, according to market-research firm IHS iSuppli.
