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Most important job of CEO (or executives in general) is communicating to shareholders and explaining them, that investments are crucial for any future returns.
Ah yes the classic “well it is a down cycle now so the revenue will grow slower over the next decade”. I don’t really know why this investor assumes that if demand is not materializing that TI would over fill their new shells. They even point out that they were smart enough to do it in the past. It is also disheartening that they don’t realize the strategic importance of this expansion in particular. TI has some 300mm fabs but they also have a lot of 200mm capacity. Doing this large 300mm build out gives them huge advantages over folks like analog devices or microchip. Besides giving a large cost per fet advantage, TI also gains access to a larger selection of tools (as most of the improvements and in many cases even new units made by tool vendors are only on their 300mm offerings). 300mm fabs are also more automated than 8in fabs. Personally if I was a large TI investor I would want them to go ahead and if things get rough sell either their 8in equipment or their 8in fabs, as they are completely obsolete if you are doing high volume with silicon wafers.
A yes the classic “well it is a down cycle now so the revenue will grow slower over the next decade”. I don’t really know why this investor assumes that if demand is not materializing that TI would over fill their new shells. They even point out that they were smart enough to do it in the past. It is also disheartening that they don’t realize the strategic importance of this expansion in particular. TI has some 300mm fabs but they also have a lot of 200mm capacity. Doing this large 300mm build out gives them huge advantages over folks like analog decks or microchip. Besides giving a large cost per fet advantage, TI also gains access to a larger selection of tools (as most of the improvements and in many cases even new units made by tool vendors are only on their 300mm offerings). 300mm fabs are also more automated than 8in fabs. Personally if I was a large TI investor I would want them to go ahead and if things get rough sell either their 8in equipment or their 8in fabs, as they are obsolete completely obsolete if you are doing high volume with silicon wafers.
Yeah as someone who competes against TI it's impossible to beat them on cost with TSMC and OSAT. They have so many more knobs and levers because they control their fabs and packaging, and building out that infrastructure right before the pandemic really was a coup.
Our company has worked with TI for many years, and they are probably one of the best run companies in the semiconductor industry. I am not sure why Elliott investors are agitating for less CapEx. You need to be more strategic about long-term fab and assenbly/packaging investments, and TI does a great job at this. If Elliott doesn't like the way the company is being run, they should sell their shares and find a different company to "influence and persuade."
Yeah as someone who competes against TI it's impossible to beat them on cost with TSMC and OSAT. They have so many more knobs and levers because they control their fabs and packaging, and building out that infrastructure right before the pandemic really was a coup.
Elliot only has $2B of TI shares, while TI has market cap of $170B. Elliot has less than 2% shares, why the company has to listen to him at all? It is unlikely he will win a proxy battle and get a seat on the board.
