Texas Instruments Incorporated (TXN): BCG Matrix [Dec-2025 Updated]

You're looking at Texas Instruments Incorporated's (TXN) engine room as of late 2025, and the BCG Matrix tells a clear story about where the money is made and where the big bets are being placed. We see the core business, driven by General-purpose Analog, acting as a rock-solid Cash Cow, generating a Trailing 12-month Free Cash Flow of $2.4 billion to fund those 22 years of dividend hikes. Meanwhile, the Stars-like Automotive and Communications Equipment-are lighting up with growth rates up to 45% year-over-year, but you've got massive Question Marks like the $5 billion 2025 CapEx for new 300mm fabs that need to pay off, all while the legacy calculator business quietly fades into the Dogs category. Let's dive into the specifics of this portfolio to see exactly where you should be focusing your attention right now.

Background of Texas Instruments Incorporated (TXN)

Texas Instruments Incorporated (TXN), incorporated in Delaware with headquarters in Dallas, Texas, designs and manufactures semiconductors sold globally to electronics designers and manufacturers. The company's operations date back to 1930, and today its business model centers on two main reportable segments: Analog and Embedded Processing, with remaining activities grouped in Other. These two core areas represent more than 90% of Texas Instruments' revenue.

Looking at the full fiscal year 2024, Texas Instruments reported total revenue of $15,641 million. The Analog segment was by far the largest contributor, generating $12.16 billion in revenue, which accounted for approximately 78% of the total. The Embedded Processing segment followed, bringing in $2.53 billion, or about 16% of the total revenue for 2024.

For the third quarter of 2025, Texas Instruments reported revenue of $4.74 billion, showing a solid 14% increase year-over-year and 7% sequential growth. Diluted earnings per share (EPS) for that quarter came in at $1.48. This performance reflects a continuing, albeit slower, cyclical recovery across the semiconductor market.

Segment performance in Q3 2025 showed the Analog revenue growing 16% year-over-year, while Embedded Processing revenue increased by 9%. The company's gross profit for the quarter was $2.7 billion, representing a gross margin of 57% of revenue. The CEO noted that four of the five end markets supported by Texas Instruments are recovering well, though the automotive industry has lagged behind.

You should note the standout growth areas driving the recent results. Specifically, the Industrial market revenue increased about 25% year-over-year in Q3 2025, Communications Equipment grew around 45% YoY, and Enterprise Systems saw about a 35% YoY increase. The Data Center Market is a significant driver, projected to hit a $1.2 billion annual run rate for Texas Instruments in 2025, with year-to-date growth exceeding 50%.

From a capital management perspective, Texas Instruments continues its focus on long-term shareholder value. Trailing 12-month Free Cash Flow (FCF) was reported at $2.4 billion as of the Q3 report, a 65% increase from the prior year period. The company recently increased its quarterly dividend to $1.42 per share, marking the 22nd consecutive year of dividend increases. Furthermore, Texas Instruments is making substantial long-term investments, announcing a $60 billion+ plan to build and expand seven fabrication plants across Texas and Utah to strengthen domestic manufacturing.

Texas Instruments Incorporated (TXN) - BCG Matrix: Stars

Stars are defined by having high market share in a growing market. Stars are the leaders in the business but still need a lot of support for promotion a placement. If market share is kept, Stars are likely to grow into cash cows. The business units or products with the best market share and generating the most cash are considered Stars. Monopolies and first-to-market products are frequently termed Stars too. However, because of their high growth rate, Stars consume large amounts of cash. This generally results in the same amount of money coming in that is going out. Stars can eventually become Cash Cows if they sustain their success until a time when a high-growth market slows down. A key tenet of a Boston Consulting Group BCG strategy for growth is to invest in Stars.

The overall Analog segment of Texas Instruments Incorporated is positioned as a Star, demonstrating market dominance and robust expansion. This segment, which accounts for the lion's share of the top line, grew 16% year-over-year in the second quarter of 2025, reflecting strong underlying demand for its core semiconductor chips. The segment's Q3 2025 performance also showed significant strength, with Analog Revenue growing 16% year-over-year, reaching $3.88 billion based on the total Q3 revenue of $4.74 billion and the reported 79% segment share.

Within the Analog segment, several key end markets exhibit the high-growth characteristics of a Star. The Automotive sector, which represents roughly 35% of Texas Instruments Incorporated's revenue, showed resilience, with revenue increasing upper-single digits year-over-year and growing about 10% sequentially in the third quarter of 2025.

Also qualifying as a Star driver is the Industrial market, where high-performance Analog chips are critical. This market saw revenue increase about 25% year-over-year in the third quarter of 2025, indicating strong investment cycles in industrial automation and equipment.

Power management and signal chain products targeted at Communications Equipment represent another high-velocity area. This specific application space grew significantly, increasing about 45% year-over-year in the third quarter of 2025, which is directly tied to massive buildouts in data center and AI infrastructure. The Data Center market itself was noted as growing above 50% year-to-date in Q3 2025, running at roughly a $1.2 billion annual run rate.

You can see the high-growth metrics for these key areas below:

These segments are consuming significant capital to maintain their market leadership and support this rapid expansion. The Embedded Processing segment, while also growing, is a supporting player to the Analog segment's Star status, showing a 9% year-over-year increase in Q3 2025.

The key characteristics supporting the Star categorization for these Texas Instruments Incorporated businesses include:

• Analog segment revenue growth of 18% year-over-year in Q2 2025.
• Industrial revenue growth of about 25% year-over-year in Q3 2025.
• Communications Equipment revenue growth of about 45% year-over-year in Q3 2025.
• Automotive revenue growth of about 10% sequentially in Q3 2025.

The company's overall revenue for Q3 2025 was $4.74 billion, up 14% year-over-year, with an operating profit of $1.7 billion. To sustain this, Texas Instruments Incorporated announced a $60 billion+ investment to build and expand seven fabs across Texas and Utah.

Texas Instruments Incorporated (TXN) - BCG Matrix: Cash Cows

The Cash Cow quadrant for Texas Instruments Incorporated (TXN) is anchored by its core, market-leading businesses that generate substantial, reliable cash flow despite operating in mature or slower-growing markets. These units require minimal new investment to maintain their position, allowing them to fund the company's other strategic endeavors.

General-purpose Analog ICs represent the quintessential Cash Cow. Texas Instruments Incorporated holds the largest global market share in this space, which is characterized by consistent demand across a vast industrial and automotive base. In the third quarter of 2025, the Analog segment revenue grew 16% year-over-year, demonstrating the segment's strength and high-margin nature, with the overall company gross profit margin at 57% for the quarter. The global analog integrated circuit market itself is projected to grow at a CAGR of above 5% over the forecast period, fitting the low-growth, high-share profile.

The company's overall financial structure reflects a classic Cash Cow strategy focused on shareholder returns. The entire business model is structured to maximize long-term free cash flow per share growth. This focus is evident in the capital allocation decisions made in 2025.

Here are the key financial metrics supporting this Cash Cow status as of the third quarter of 2025:

You're looking at a business unit that consistently converts sales into cash. The Trailing 12-month Free Cash Flow (FCF) was $2.4 billion as of Q3 2025, directly supporting the company's 22nd consecutive year of dividend increases, which was announced in September 2025. This cash generation is the engine for the corporation.

The Embedded Processing products, particularly older microcontrollers, fall into this quadrant because they serve stable, long-lifecycle industrial applications. While this market is mature, the segment still delivered solid performance in Q3 2025, with revenue increasing 9% year-over-year. Investments here are primarily aimed at efficiency, not market expansion, which aligns with the Cash Cow mandate to 'milk' the gains passively.

The strategy for these units is clear:

• Maintain market leadership in Analog Integrated Circuits.
• Invest in infrastructure to improve efficiency, such as closing older 250-millimeter fabs, to further boost cash flow.
• Continue the disciplined capital allocation focused on long-term free cash flow per share growth.
• Use the resulting cash to fund higher-growth areas and return capital to shareholders.

These products are the bedrock of Texas Instruments Incorporated's financial stability. Finance: draft the Q4 2025 cash flow projection based on the $2.4 billion TTM FCF by Friday.

Texas Instruments Incorporated (TXN) - BCG Matrix: Dogs

You're looking at the parts of Texas Instruments Incorporated (TXN) that aren't driving the growth story, the segments where market share and growth rates are minimal. These are the units where capital is better redeployed elsewhere, frankly.

The Education Technology products, which include calculators, are firmly situated within the Other segment for reporting purposes. This segment generated $947 million in revenue for fiscal year 2024. To put that in perspective against the core business, the Analog segment alone brought in $12.16 billion in 2024. While the 'Other' segment saw a 14% year-over-year revenue increase in Q2 2025, its overall contribution remains small, suggesting low growth relative to the company's primary focus areas.

The strategic move away from older manufacturing technology clearly signals a divestiture or minimization approach for legacy assets. Texas Instruments Incorporated is actively phasing out older 200-mm wafer manufacturing capacity. This is happening as the company pours capital into new, more efficient 300mm fabs, with a total planned investment exceeding $60 billion across seven U.S. fabs. The financial logic is clear: the shift to 300mm wafers is expected to yield potentially 40% lower costs compared to the 200-mm process. Keeping older, less cost-efficient 200mm capacity running ties up capital that could be used for these high-return 300mm expansions.

Legacy product lines that are not core to the current Analog and Embedded Processing focus are candidates for minimization. These two core segments accounted for approximately 94% of total 2024 revenue (78% and 16%, respectively). Any product line outside of these two pillars, which includes the Education Technology products, is inherently low-priority in terms of strategic investment.

Here's a quick look at how the non-core 'Other' segment stacks up against the main revenue drivers based on 2024 figures:

The expectation for these Dog-like units is clear: avoid expensive turnarounds. The focus is on capital discipline and maximizing free cash flow per share, which means these low-share, low-growth areas are prime for divestiture or minimal maintenance spending.

• Education Technology market is highly mature.
• Older 200mm fabs are being replaced by 300mm capacity.
• Legacy lines have declining unit volumes.
• The Other segment was only $947 million in 2024 revenue.
• Strategic investment is heavily weighted toward 300mm capacity.

If onboarding takes 14+ days, churn risk rises, and similarly, if legacy assets require significant capital to maintain, the risk of them becoming cash traps increases defintely. Finance: draft the capital allocation report comparing 200mm vs 300mm cost-per-wafer by next Wednesday.

Texas Instruments Incorporated (TXN) - BCG Matrix: Question Marks

Question Marks represent business units operating in high-growth markets but currently holding a low market share. These areas consume significant cash, primarily through investment, while their returns are not yet commensurate with the growth potential. For Texas Instruments Incorporated (TXN), these units require strategic decisions regarding heavy investment to capture market share or divestiture.

The following areas fit the profile of Question Marks for Texas Instruments Incorporated as of 2025:

• High-performance power and signal chain chips for the Data Center market, which is growing above 50% year-to-date with a $1.2 billion run rate.
• Augmented Reality (AR) enabler technology, specifically the DLP Pico products, which is a small part of the business but targets a high-growth future market.
• New 300mm wafer capacity in Sherman, Texas (SM1 and SM2), which requires massive CapEx of about $5 billion in 2025 but is not yet fully ramped to deliver its cost advantage.
• Specific new Embedded Processing platforms for emerging AI-at-the-edge applications, which are high-growth but face intense competition from specialized rivals.

The Data Center segment exemplifies the high-growth/low-share dynamic. While the company's revenue from this segment is growing at a pace above 50% annually in 2025, it still represents only a single-digit percentage of Texas Instruments Incorporated's total sales. The CEO projects US$1-1.2 billion in revenue from data centers in 2025, indicating substantial scale-up is needed to reach the potential 20% of total sales the company envisions.

Here are the key metrics illustrating the growth and current scale:

The massive capital outlay for next-generation manufacturing capacity is a direct investment to secure future low-cost production, a necessary step to convert these Question Marks into Stars. The Sherman, Texas mega-site is central to this strategy.

Capital Expenditure and Fab Ramp Status:

• Total planned investment across seven U.S. fabs is more than $60 billion.
• The Sherman site investment is up to $40 billion for four fabs (SM1, SM2, SM3, SM4).
• Expected capital spending budget for 2025 is $5 billion.
• SM1 began initial production in 2025.
• Exterior shell construction for SM2 is complete.

For Augmented Reality (AR) enabler technology via DLP Pico products, specific revenue figures are not isolated, but they fall under the Other Segment, which reported a 23% increase in revenue in one quarter. This technology supports AR head-up displays and wearable systems, positioning Texas Instruments Incorporated to benefit from the high-growth future AR market, though it remains a small component of the overall business.

The Embedded Processing platforms targeting AI-at-the-edge are also in a high-growth market, but face stiff rivalry. Performance in this segment has shown volatility, which is typical for a unit fighting for share in a competitive, emerging space. For instance, in Q1 2025, the Embedded Processing segment saw revenue dip 1% year-over-year to $647 million, with operating profit falling sharply by 62% to $40 million. Conversely, in Q2 2025, this segment's revenue was reported as rising 10% year-over-year. The broader Embedded AI Computing Platforms Market is projected to grow from $34.98 Bn in 2024 to nearly $53.28 Bn by 2032.

You're looking at significant cash burn now to secure future dominance in these areas. Finance: draft 13-week cash view by Friday.