Texas Instruments Builds Bigger Lead in Analog Chip Market

Texas Instruments, the world's largest supplier of analog semiconductors, widened its lead in the $59 billion segment last year, according to estimates by IC Insights. The company's analog chip sales were double those of second-ranked Analog Devices, three times those of third-ranked Infineon Technologies and 10 times those of tenth-ranked Renesas Electronics in 2018, the market researcher said.

Analog sales at Texas Instruments swelled from $9.9 billion to $10.8 billion in 2018, yielding 18% market share, according to IC Insights. With analog semiconductor sales of $5.5 billion, Analog Devices held 9% market share in 2018, said IC Insights. Infineon, the world's largest vendor of power semiconductors, sold $3.8 billion of analog chips in 2018, holding 6% market share, slightly more than Skyworks Solutions. 

The top 10 suppliers secured 60% of the global analog chip market in 2018, or $36.1 billion, compared to 61% in 2017, or $33 billion. Sales at ST Microelectronics surged more than 25% to $3.2 billion, amounting to 5% market share. The company came out ahead of NXP Semiconductors ($2.65 billion in analog sales), Maxim Integrated ($2.15 billion of revenue) and On Semiconductor ($2 billion), IC Insights noted.

Texas Instruments has the broadest range of products and longest list of customers in the semiconductor industry. The company has seen strong sales growth as the amount of analog content inside factories and cars grows. Sales to industrial and automotive customers came to 56% of its analog chip business in 2018, up from 42% in 2013. These businesses afford the best opportunity for future growth, IC Insights said. 

Analog chips are among the basic building blocks of all electronic devices, handling the fundamental task of translating things like touch and sounds into electronic signals. Texas Instruments primarily targets industrial, automotive and consumer applications, which accounted for 36%, 20% and 23% of its analog chip sales in 2018, respectively. And all three businesses are highly profitable, according to IC Insights.

But the Dallas, Texas-based company has started off 2019 in a slump. Automotive and industrial sales declined by mid-single-digit percents in the first quarter of 2019. Consumer electronics sales have also slipped over the last year due to stunted sales of smartphones and personal computers. Analog chip demand will continue to drop in the current quarter, Chief Executive Officer Richard Templeton said last month.

Chief Financial Officer Rafael Lizardi said the "the weakness we are seeing is primarily due to the semiconductor cycle," adding that "typically the industry [sees] four to five quarters of year-on-year declines before year-on-year growth resumes." He said on an analyst conference call in April: "Given our experience, we will stay focused on [getting] stronger for the long-term, while remaining diligent in the short-term."

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