Texas Instruments earnings info / call

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TXN's earnings was released today, I guess the first of the major manufacturers this quarter. (except for TSMC 2 weeks ago)

Seeking Alpha posted a transcript of the earnings call a little while ago: https://seekingalpha.com/article/45...rporated-txn-q3-2022-earnings-call-transcript

Nothing momentous, but I thought this excerpt about inventory was interesting:

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Rafael Lizardi (TI CFO)

And now more recently, we added $200 million of inventory in this last quarter, but we are still below these higher levels. Okay. Keep in mind, our business model is such where we are targeting the vast major of our parts sell to many, many customers. So they are very broad in nature. The product life cycles of the parts is decades in many times, the products themselves last 10 years in inventory, most of them. So the risk of selection for the inventory is very, very low. The potential upside of having that inventory ready is very high. So that’s why we prefer to have more than less inventory. So I would not be uncomfortable, as I said before, adding another $1 billion, $1.5 billion of inventory over the next several quarters to get us well positioned for the next upturn that invariably comes at some point.

 

[nghanayem]

TXN's earnings was released today, I guess the first of the major manufacturers this quarter. (except for TSMC 2 weeks ago)

Seeking Alpha posted a transcript of the earnings call a little while ago: https://seekingalpha.com/article/45...rporated-txn-q3-2022-earnings-call-transcript

Nothing momentous, but I thought this excerpt about inventory was interesting:

====

Rafael Lizardi (TI CFO)

And now more recently, we added $200 million of inventory in this last quarter, but we are still below these higher levels. Okay. Keep in mind, our business model is such where we are targeting the vast major of our parts sell to many, many customers. So they are very broad in nature. The product life cycles of the parts is decades in many times, the products themselves last 10 years in inventory, most of them. So the risk of selection for the inventory is very, very low. The potential upside of having that inventory ready is very high. So that’s why we prefer to have more than less inventory. So I would not be uncomfortable, as I said before, adding another $1 billion, $1.5 billion of inventory over the next several quarters to get us well positioned for the next upturn that invariably comes at some point.

Definitely putting a spin on the matter, but it is interesting that he points out the life cycles and how it isn't the end of the world. As opposed to TSMC making too many A14s and having to sit on them (chips that only depreciate in value), vs a power IC or analog to digital converter which doesn't have a replacement next year and is a commodity item that any customer can swoop up and buy.

 

[Paul2]

Definitely putting a spin on the matter, but it is interesting that he points out the life cycles and how it isn't the end of the world. As opposed to TSMC making too many A14s and having to sit on them (chips that only depreciate in value), vs a power IC or analog to digital converter which doesn't have a replacement next year and is a commodity item that any customer can swoop up and buy.

Even all Apple devices taken together would've only been few % of unit volume for TI

On the other hand, lots of new defence business must be coming.

Javelin ATGM as I remember is made by TI?

 

[nghanayem]

Even all Apple devices taken together would've only been few % of unit volume for TI

On the other hand, lots of new defence business must be coming.

Javelin ATGM as I remember is made by TI?

I was more so making an example that an SOC for a smartphone or server chip needs to be sold right away, whereas most of TI's chips can just sit in a warehouse and be as valuable two years from now as they are today.

As for defense contracts, army and army weapon systems are small time (relatively speaking). The lion's share of DOD money goes to the airforce and navy (rising tensions with the PRC will only accelerate this trend).