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Texas Instruments Shares Fall 6% as Weak Outlook Points to Extended Chip Market Slowdown

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Texas Instruments (TXN.O) shares dropped 6% on Wednesday after the chipmaker issued a disappointing forecast for the fourth quarter, warning of a prolonged slump in the analog semiconductor market. The bleak outlook has fueled fears that the chip industry’s long-awaited rebound could take longer than expected amid tariff uncertainty and sluggish industrial demand.

TI projected fourth-quarter revenue of $4.4 billion and earnings per share of $1.26, both falling short of analyst expectations. The company’s gross profit margin also slipped by 50 basis points from the previous quarter. Analysts say customers remain cautious about new capital spending, taking a “wait-and-see” approach as global trade and tariff rules remain unclear.

The company’s struggles highlight how geopolitical tensions and U.S. trade policies under President Donald Trump’s administration are weighing on the semiconductor industry. Though TI has reduced some of its exposure to tariffs through trade deals, the potential for new 100% semiconductor import duties has rattled confidence, even as domestic manufacturers are offered exemptions.

Brokerage firm Jefferies said it expects the rest of the Analog group to experience similar softness, while Charter Equity Research noted that weak customer demand and excess inventory could suppress margins for several more quarters.

Shares of other analog chipmakers, including On Semiconductor (ON.O), NXP Semiconductors (NXPI.O), and Analog Devices (ADI.O), also fell between 2% and 3% following the report. At least 16 brokerages cut their price targets for TI after the announcement, with the company poised to lose around $10 billion in market value if declines persist.

Despite a $60 billion investment plan to expand U.S. manufacturing, TI’s near-term outlook remains clouded by macroeconomic uncertainty and weaker industrial spending. Its stock has fallen 4% this year, trading at a 12-month forward P/E ratio of 29.05, above Analog Devices’ 26.24 — a sign investors remain cautious on its valuation amid the slowdown.

Japan’s Renesas weighs $2 billion sale of timing unit amid semiconductor reshuffle

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Renesas Electronics Corp., one of Japan’s largest semiconductor makers, is considering a sale of its timing division in a deal that could value the business at nearly $2 billion, according to people familiar with the matter.

The company has hired JPMorgan to advise on the potential divestment, which remains in its early stages. Sources said the process is expected to attract bids from major chipmakers, including Texas Instruments in the United States and Germany’s Infineon Technologies. None of the companies involved have commented publicly on the talks.

Renesas’ timing division produces specialized integrated circuits (ICs) that handle clock, timing, and synchronization functions — essential components for data centers, telecommunications systems, and 5G network infrastructure. These chips act as the “metronome” for electronic systems, ensuring precise coordination of data flow in high-speed environments.

The move comes as global demand for chips powering AI-driven data centers and networking infrastructure continues to soar. Selling the unit could allow Renesas to raise capital and sharpen its focus on core markets, particularly automotive and industrial semiconductors — areas where it is a major global supplier.

Renesas has expanded aggressively in recent years through acquisitions to build a broader portfolio of analog and power management chips. The possible divestment reflects a wider industry trend of portfolio consolidation, as chipmakers seek to streamline operations and concentrate on growth areas.

Texas Instruments Warns of Cooling Demand After Tariff-Driven Surge

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Texas Instruments (TXN.O) said on Thursday that customer demand has slowed following a sharp spike in April, when buyers rushed to place orders ahead of U.S. President Donald Trump’s “Liberation Day” tariff announcement. Shares of the chipmaker fell nearly 4% after the update, delivered at the Citi Global TMT Conference by Chief Financial Officer Rafael Lizardi.

Lizardi explained that January-to-April demand was temporarily lifted by tariff-related market dynamics but noted that “things did slow down after April, or at least didn’t grow as they normally would have.”

The finance chief also addressed speculation about potential government stakes in semiconductor firms, clarifying that TI has not been approached about equity participation in exchange for CHIPS Act incentives. The Trump administration’s decision to take a 9.9% stake in Intel (INTC.O) has fueled debate about government involvement in the industry, but Lizardi said, “Nothing along those lines has been discussed or proposed” for TI.

Under the CHIPS and Science Act, the Commerce Department has earmarked up to $1.6 billion in funding for Texas Instruments. Lizardi said the agreement, initially signed under the Biden administration and later adjusted under Trump, saw only “minor, favorable changes.”

TI’s free cash flow remains under pressure from elevated capital expenditure, with share repurchases continuing but at a reduced pace. In July, the company issued a profit forecast that signaled weaker-than-expected demand for its analog chips, particularly from the automotive sector, which has been slow to rebound. Despite challenges, TI reiterated that four of its five end markets are showing recovery, with autos lagging due to broader economic uncertainty.