Texas Instruments comprehensively lowered chip prices in the Chinese market in May this year, attempting to seize more market share in the darkest moments before the industry recovers.
A senior executive from a certain analog chip factory stated that "there is no fixed range or bottom line for TI's price reduction this time.
The impact of the price reduction of Texas Instruments this time is even greater on general analog chips, while the impact on the relatively dispersed market of various specialized analog chips is uneven.
Among them, general analog chips include two categories: power management and signal chain, which are the hardest hit areas for Texas Instruments' price reduction strategy. Many market participants believe that Texas Instruments' price reduction strategy in China will show results as soon as possible in the second quarter of this year, and they are generally optimistic that its revenue will rebound. However, under the influence of the price reduction strategy, the company's profit performance will not significantly improve.
Texas Instruments (TI) has recently received news of price reductions, which have been significant. It is reported that TI's PMIC in Taiwan, China, China, has significantly reduced its price by 20% - 30% to seize market share and improve capacity utilization. This magnitude of price reduction is rare for simulation chip leader TI, fully reflecting the "cold weather" in the market
Looking at TI's recent financial report, you can also understand its decision to significantly lower prices. In the * quarter of 2023, the company's revenue was $4.379 billion, a year-on-year decrease of 11%, operating profit was $1.934 billion, a year-on-year decrease of 25%, and earnings per share was $1.85, a year-on-year decrease of 21%. Among them, the revenue of analog chips was $3.289 billion, a year-on-year decrease of 14%, and the revenue of embedded processing chips was $832 million, a year-on-year increase of 6%* The quarterly inventory days increased by 38 days month on month to 195 days, and the inventory amount increased by $531 million month on month to $3.3 billion. It can be seen that market demand has declined and inventory has significantly increased.
Such poor performance, especially the revenue of the main analog chip, has experienced a significant decline. In the context of weak overall market demand, there seems to be no better way than to lower prices.