On April 23rd, Texas Instruments (TI) announced that its second quarter revenue forecast was higher than Wall Street's estimate. Despite the uncertainty in the entire semiconductor industry caused by the threat of US tariffs, the company is still betting on strong demand for its analog chips.
According to LSEG data, Texas Instruments expects its revenue for the June quarter to be between $4.17 billion and $4.53 billion, with an average analyst estimate of $4.1 billion. Earnings per share are expected to be between $1.21 and $1.47, which is also higher than expected.
Kinngai Chan, Senior Analyst at Summit Insights Group, said, "The cyclical demand recovery and possible tariff reductions have driven optimistic forecasts
However, Haviv Ilan, CEO of Texas Instruments, still issued a warning. He said in a conference call after the release of the financial report that "we must see what happens" in the second half of 2025 and 2026, and pointed out that uncertainty surrounding tariff policies is still ongoing.
Although President Trump has temporarily exempted additional tariffs on semiconductors, according to a notice from the China Semiconductor Association in early April, China has imposed high tariffs on American made chips.
Analysts asked Ilan if customers were hoarding chips before the expected tax. He said, 'I guess at times like this, when people are a little anxious, do you want to add some inventory to your shelves?'
It may be too early to determine the impact of tariffs and the escalation of trade frictions between China and the United States. Stifel analyst Tore Svanberg pointed out that trade tensions have had an impact on the company and the broader chip industry due to unresolved tariff negotiations.
Texas Instruments has a large manufacturing capacity in the United States, with one-fifth of its annual revenue coming from China, making it vulnerable to tariffs between China and the United States.
Ilian said that if necessary, the company can rely on its manufacturing factories in China.
For many years, traditional chip manufacturers have been striving to adopt a "Made in China" strategy, setting up wafer fabs in China to meet domestic demand amid escalating geopolitical tensions.
However, Texas Instruments has always faced fierce competition in China. Driven by government subsidies, domestic chip manufacturers in China have increased their production of mature node semiconductors. The competition in China is intensifying, "said Ilan.
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