Texas Instruments Inc at UBS Global Technology and AI Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Timothy Arcuri - UBS - Analyst : Great. So Haviv, maybe we can start. You had your off-cycle Capital Management Day. You talked about spending a lot of money through 2026. And if the revenue growth is not there after that, you could cut the spending. So can you just talk generically about how you're thinking about basically intersecting your capacity additions with demand?

Question: Timothy Arcuri - UBS - Analyst : And how important has the CHIPS Act been in terms of timing some of those investments?

Question: Timothy Arcuri - UBS - Analyst : You've been at the company a long time, and you've been on the board since 2021. You've been CEO since 2023. As you look back at this last cycle, what did you learn from the last cycle that you take forward with you over the next five to 10 years? What did the company do right, and what do the company do wrong?

Question: Timothy Arcuri - UBS - Analyst : So can you talk a bit about the demand environment currently? Are you seeing customers come to you with more rush orders and more expedites where they say, I need it, and I need it now. And is that a good sign? Do you read it that as? Or would you say, just as many customers are saying, well, I'm still burning down inventory as customers that are coming to you saying, I need it and I need it now?

Question: Timothy Arcuri - UBS - Analyst : Is there sort of anything in the last month or two that is encouraging to you? I asked this because we had a company that's levered to the auto industry yesterday, and we were speaking with them. And they were speaking about some recent green shoots and autos and mostly was China, but the comment was also even beyond China. So are you encouraged by what you've seen in the past couple of months? Or is it still -- you would just say it's mixed?

Question: Timothy Arcuri - UBS - Analyst : Great. Let's talk about market share because this is an interesting question that your share quote of the analog market went down about 350 basis points versus what it was pre-COVID. Now, we can debate why that was. I think part of it was the fact that you didn't have enough capacity, and you talked about that. Part of it was that you don't have take-or-pays or NCNRs, and some of your peers did. And obviously, that's not coming back to bite them. So can you talk about market share? And when I look at my competitors' estimates, they basically are sort of superimposing today as the base. And just growing you at an analog market growth. When really my contention would be that you ought to regain most, if not all, of that share over the next few years. How do you think about that share? Are you confident you're going to regain that share and sort of -- like what are the mileposts that you're looking at?

Question: Timothy Arcuri - UBS - Analyst : Can we talk about China, because China is an omnipresent debate for investors. The perception is that it's a melting ice cube because of all the money that they're investing in these lagging nodes. Can you talk about how competitive you are in China? In many ways, I see you as one of the only Western suppliers that can compete in China over the longer term. Can you kind of talk about that?

Question: Timothy Arcuri - UBS - Analyst : Just on China also, there's a lot of talk about tariffs. And you have a back-end site in Chengdu. Have you begun a strategy to sort of hedge if you had to source back-end supply elsewhere, could you fully source it at other sites?

Question: Timothy Arcuri - UBS - Analyst : Can we talk about the EV market in China? One surprise, I think, coming into earnings, everyone expected autos to be weak and expected industrial to maybe be getting a little better. And it was actually the opposite. Autos turned out -- not just for you, but for everybody -- autos was a bit better than feared during earnings, and industrial still was weaker or not getting better as people had hoped that it would. Now, a lot of the auto story is in China, and that does appear to be better than what people thought. Can you talk about exactly what's going on in China, what the dynamics are? Is it all related to EV? Are there other factors at work?

Question: Timothy Arcuri - UBS - Analyst : Can we talk about the CHIPS Act for a moment? It's both grants and it's ITC. The ITC seems pretty bulletproof. It's -- whenever you're investing and you're putting in the capacity, you get a credit against that. The grants are a different animal though. Could that change? So in the new administration, could there be maybe a renegotiation of the milestones to get the grant money? How do you sort of see the grants evolving?

Question: Timothy Arcuri - UBS - Analyst : Can you walk us through sort of some of the qualification? I know Phase 1 of your current CapEx plan is largely a transfer story. You're moving 150mm production, moving it into RFAB and external foundry production MCUs moving into LFAB. How is the qualification process going?

Question: Timothy Arcuri - UBS - Analyst : Great. Can we talk about lead times and inventory management? You have stated eight to 12-week lead times. But in reality, your lead times are basically zero, because when a customer is on consignment, when they want it, they pull it. When they don't, they don't. Yet, you have a pretty advanced inventory management system, and you've moved away from build to order. So can you talk a little bit about that? We all see the inventory number on your balance sheet so high, and I get asked the question all the time, don't you worry about that? Isn't that a problem? And I say, no, it's not. So I'm just I'm just sort of wondering how you think about the inventory model.

Question: Timothy Arcuri - UBS - Analyst : I do too. So we've run out of time. Thank you, Haviv.