Texas Instruments expects the global semiconductor market recovery to continue into 2026, supported by strong demand across key end markets, particularly data centers, industrial applications, and automotive electronics. The outlook was shared during the company’s fourth-quarter earnings call, where executives pointed to improving fundamentals and expanding capacity as drivers of future growth.
The Dallas-based chipmaker reported fourth-quarter revenue of $4.4 billion, marking a 10% increase year over year, largely driven by sustained growth in data center demand. However, revenue declined 7% sequentially from the third quarter. Net income for the quarter came in at $1.16 billion, down 3% compared with the same period last year.
Chief Executive Officer Haviv Ilan said the data center segment has been a standout performer, recording growth for seven consecutive quarters and becoming an increasingly meaningful contributor to overall results. He noted that the broader semiconductor market continues to recover and that Texas Instruments is well positioned to meet customer demand in 2026, supported by inventory levels and capacity investments made over recent years.
While the company sees opportunities across all its served markets, Ilan highlighted industrial, data center, and automotive applications as areas with the strongest near- and mid-term potential. Industrial demand, in particular, is showing signs of a sustained rebound, with expectations that the segment could reach new highs over time. Data centers are also playing a larger role in revenue growth, beginning to materially influence overall performance.
Automotive remains a core pillar of Texas Instruments’ business, accounting for roughly 35% of total revenue. The segment generated $5.8 billion, up 6% year over year, with notable strength observed in China during the fourth quarter. Ilan said the company expects automotive demand to continue growing over the next five years as vehicles become increasingly electrified and software-driven.
Financially, Texas Instruments reported operating cash flow of $7.2 billion over the trailing 12 months, underscoring the strength of its business model and the benefits of 300mm wafer production. Free cash flow for the same period totaled $2.9 billion. Over the past year, the company invested $3.9 billion in research and development as well as selling, general, and administrative expenses, spent $4.6 billion on capital expenditures, and returned $6.5 billion to shareholders.
Segment-wise, the analog business—covering power management and signal chain products—grew 14% year over year in the fourth quarter, while the embedded processing segment, including microcontrollers, processors, and radar products, increased 8%.
Looking ahead, Texas Instruments forecast first-quarter revenue in the range of $4.32 billion to $4.68 billion, with expected earnings per share between $1.22 and $1.48. Chief Financial Officer Rafael Lizardi said the company will continue to prioritize investments in data centers and other areas that generate long-term free cash flow, maintaining a disciplined approach focused on sustainable value creation.
