Texas Instruments (TXN.O) warned of a weak fourth quarter, deepening investor worries that the analog semiconductor sector faces a longer recovery than expected. The company’s shares fell 6% after it forecast revenue of $4.4 billion and earnings per share of $1.26, both missing Wall Street estimates.
TI’s results highlight how tariff uncertainty, high inventories, and muted industrial spending are stalling demand. Many of its customers, particularly in manufacturing and automation, have paused factory expansion plans, waiting for clarity on potential U.S. trade rules.
The company’s gross margin declined slightly from the previous quarter, and analysts warn that profitability could stay depressed for several quarters. “We expected customers to have cleared excess inventory by now, but demand has been slower to return,” said Charter Equity Research, adding that potential Chinese trade countermeasures could further dampen recovery.
President Donald Trump has floated a 100% import tariff on semiconductors, though no formal measure has been enacted. While TI has pledged $60 billion to expand U.S. manufacturing, analysts say global uncertainty continues to weigh heavily on sentiment.
Shares of peers On Semiconductor, NXP, and Analog Devices also dropped 2–3% on Wednesday, and 16 brokerages lowered their price targets for TI. The company’s valuation now stands at a 12-month forward P/E of 29.05, compared with 26.24 for Analog Devices.
Despite short-term challenges, analysts see TI’s long-term strategy to localize production as a potential hedge against future trade disruptions. Still, for now, the analog chip market — a cornerstone of industrial electronics — remains stuck in neutral.
