Semiconductor Industry Recovery: TI CEO Releases Key Signals

Overall Industry Trends

Since hitting bottom in the first quarter of 2024, the global semiconductor industry has gradually entered a recovery phase. Texas Instruments (TI) CEO Haviv Ilan stated at the Goldman Sachs Communications and Technology Conference that four out of the five core sub-markets have shown signs of recovery, with only the automotive sector still struggling at the bottom. Although geopolitical and trade frictions add uncertainty, the overall market has started to show positive signals.

• Consumer Electronics: First to rebound.
• Communications: Recovered soon after.
• Data Centers: Growing ~50% annually, nearing 2022 peak.
• Industrial Sector: Recovery ongoing for 2-3 quarters, but most areas remain 20%-40% below peak.
• Automotive: Resilient; China’s EV penetration has reached 55%.

TI’s Core Strategic Layout

As a global leader in analog semiconductors and embedded processing, TI has identified industrial, automotive, and data centers as its three core markets, driving growth through differentiated product portfolios and technological innovation.

Industrial Market

Focus on automation, electrification, and digital transformation.

Aerospace and defense have recovered and hit record highs.

Automotive Market

Covers ADAS, EV power systems, body electronics, and smart cockpits.

Semiconductor content per vehicle continues to increase, showing long-term potential.

Data Center Market

Currently ~5% of revenue, but growing at over 50%.

Expected to reach 20% share in the near future.

Capacity & Operational Strategy

TI learned from the previous industry cycle and launched a forward-looking capacity investment plan in 2021 to prepare for future demand peaks.

• Construction Cycle: Wafer fabs typically take 3-4 years from planning to production.
• Inventory Management: Maintains flexibility via data-driven forecasting systems.
• Business Optimization: Enhanced expansion of analog products, embedded products now fully in-house.
• Localized Manufacturing: Gross margins remain above 60% after achieving self-sufficient production.

Addressing Geopolitical Challenges

Ilan emphasized that although U.S.-China tensions and early stocking have caused short-term fluctuations, they do not change the long-term trajectory. With manufacturing networks in the U.S., Asia, and China, TI has effectively mitigated the impact of tariffs and trade barriers, ensuring supply chain stability.

Conclusion

The semiconductor industry is emerging from its downturn. By focusing on industrial, automotive, and data center markets, and leveraging capacity investments and innovation, TI is building a solid foundation for the next growth cycle. Over the next decade, automation, electrification, and digitalization will drive accelerated industry development.