AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Operating owned fabs, qualified 300mm production and substantial replication requirements demonstrate a manufacturing foundation beyond a margin-based inference. The claimed cost differential compares wafer formats rather than all competitors.
durability · 2/4 · Capital-intensive manufacturing and recurring software-investment friction support persistence, but technological change and absent competitor cost trajectories limit confidence in long-term protection.
customer dependency · 2/4 · Prior embedded-software investment creates dependency in part of the portfolio. A broad customer base and large portfolio do not establish lock-in, and migration costs are unquantified.
erosion resilience · 2/4 · Demand and gross profit recovered in first-half 2026, while three-year revenue growth remained negative and fixed manufacturing costs expose economics to utilization. Competition risks are prospective, not proof of realized share loss.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · — · Revenue growth is attributed to demand and shipment volumes. No observed comparable-product price outcome is supplied; prospective pricing pressure cannot substitute for realized pricing evidence.
retention · 2/4 · Embedded-software investment supports repeat-demand friction, and embedded revenue increased with demand. This is indirect operating evidence rather than measured customer retention; cyclical demand remains a confounder.
margin resilience · 2/4 · Gross margin fell from 58.1% to 57.0% in 2025, then rose from 57.4% to 59.8% in first-half 2026. Expansion costs and factory loadings explain material variation, supporting mixed resilience rather than demonstrated price protection.
contractual freedom · — · Direct sales penetration does not establish contractual pricing discretion. Customer repricing rights, fixed-price commitments and limits on changing terms are not supplied.
Predictability71
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 11.47
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 10.78
Financial strength73
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 37.19
- netDebtEbitGrade
- 64.06
- interestCoverageGrade
- 91.75
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 5.40
- Net debt / operating income (x)
- 1.80
- Interest coverage (x)
- 11.09
- Current ratio (x)
- 4.35
Capital allocation83
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 25.09
- 3-year average dilution (%)
- -0.25
- 3-year average SBC / revenue (%)
- 2.30
- cashConversionGrade
- 33.42
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual first-half 2026 operating cash flow increased while capital spending and repurchases declined. Against that, 2025 shareholder returns exceeded disclosed free cash flow, average shares increased in first-half 2026, and the pending acquisition adds a substantial financing commitment with unproven returns. Incentives also contribute to cash generation.
incentive alignment · 2/4 · Actual equity grants, four-year RSU vesting, anti-hedging and clawback policies support alignment. Discretionary compensation, a bonus increase despite weak multiyear growth and shareholder returns, and continued retirement vesting temper it. Executive ownership amounts are missing.
execution · 2/4 · Fab qualification and ramps, lower inventory days, stronger operating cash flow and no material warranty accruals or payments demonstrate delivery. Execution is assessed partly from indirect operating results; demand-led recovery and negative three-year revenue growth prevent a strong overall grade.
governance · 3/4 · Disclosed annual elections, majority voting, lead-director powers, separation of executive compensation decisions and an unqualified internal-control opinion provide strong concrete safeguards. Combined chairman/CEO roles and discretionary pay assessment limit the conclusion; exceptional governance outcomes are not established.
Evidence
The strategic decision to own our manufacturing, process and packaging technology provides us with tangible benefits of lower manufacturing costs and greater control of our supply chain and provides our customers with geopolitically dependable capacity.
MD&A / Manufacturing / owned technology and supply control · Filed 24/07/2026
We own and operate both wafer fabrication and assembly/test facilities in North America, Asia, Japan and Europe.
MD&A / Manufacturing / operating facilities · Filed 24/07/2026
We have focused on creating a competitive structural cost advantage by investing in our 300mm wafer production, which describes the diameter of the wafer on which our chips are produced, and costs about 40% less than a chip built on a 200mm wafer.
MD&A / Manufacturing / 300mm cost comparison · Filed 24/07/2026
The company continued to qualify and ramp production at its 300mm wafer fabs in Richardson, Texas, Lehi, Utah and Sherman, Texas.
Executive compensation / Strategic progress / qualified and ramping fabs · Filed 04/03/2026
Semiconductor cycles are affected by the significant time and money required to build and maintain semiconductor manufacturing facilities.
Business / Semiconductor cycle / manufacturing time and investment · Filed 06/02/2026
This broad portfolio includes more than 80,000 products that are integral to almost every type of electronic equipment.
Business / Product information / portfolio breadth · Filed 06/02/2026
In 2025, more than 80% of the company’s revenue was direct.
Executive compensation / Strategic progress / direct revenue share · Filed 04/03/2026
When factory loadings decrease, our fixed costs are spread over reduced output and, absent other circumstances, our profit margins decrease.
MD&A / Results of operations / lower factory loadings · Filed 24/07/2026
Our gross profit was also impacted by higher manufacturing costs associated with our planned capacity expansions, partially offset by reduced costs related to increased factory loadings.
MD&A / 2025 results / expansion and factory-loading costs · Filed 06/02/2026
The price and product development pressures that result from competition may lead to reduced profit margins and lost business opportunities in the event that we are unable to match the price declines or cost efficiencies, or meet the technological, product, support, software or manufacturing advancements of our competitors.
Risk factors / Competition / price and development pressure · Filed 06/02/2026
Certain competitors possess sufficient financial, technical and management resources and utilize available incentives offered by various countries and government entities to develop and market products that may compete favorably against our products, and consolidation among our competitors may allow them to compete more effectively.
Risk factors / Competition / competitor resources and incentives · Filed 06/02/2026
Rapid technological change in markets we serve could contribute to shortened product life cycles and a decline in average selling prices of our products.
Risk factors / Technological change / life cycles and selling prices · Filed 06/02/2026
In addition, customers’ prior investments in software development is also a competitive factor for our embedded processing products.
Business / Competition / embedded software investment · Filed 06/02/2026
In addition, manufacturing process and package technologies that provide differentiated levels of performance and a structural cost advantage are competitive factors for our analog products, and customers’ prior investments in software development is a competitive factor for our embedded processing products.
Business / Competition / process technology and embedded software · Filed 02/02/2024
Embedded Processing (includes microcontrollers and processors) Q2 2026 Q2 2025 Change Revenue $ 788 $ 679 16 % Operating profit 168 85 98 % Operating profit % of revenue 21.3 % 12.5 % Embedded Processing revenue increased due to higher demand.
MD&A / Embedded Processing / demand-led growth · Filed 24/07/2026
•When we discuss our results: ◦Unless otherwise noted, changes in our revenue are attributable to changes in customer demand, which are evidenced by fluctuations in shipment volumes.
MD&A / Results of operations / shipment-volume attribution · Filed 24/07/2026
Details of financial results – first six months of 2026 compared with first six months of 2025 Revenue of $10.29 billion increased $1.77 billion, or 21%, due to increased demand in our Analog segment and, to a lesser extent, in our Embedded Processing segment.
MD&A / First-half 2026 results / demand-led revenue growth · Filed 24/07/2026
Gross profit of $6.15 billion was up $1.26 billion, or 26%, primarily due to higher revenue, partially offset by higher manufacturing costs associated with our planned capacity expansions.
MD&A / First-half 2026 results / gross-profit drivers · Filed 24/07/2026
As a percentage of revenue, gross profit increased to 59.8% from 57.4%.
MD&A / First-half 2026 results / gross margin · Filed 24/07/2026
As a percentage of revenue, gross profit decreased to 57.0% from 58.1%.
MD&A / 2025 results / gross-margin decline · Filed 06/02/2026
•Three-year performance ◦Compound annual revenue growth for 2023-2025 was -4.1%, which was below the median for Semiconductor Peers.
Executive compensation / Three-year performance / revenue contraction · Filed 04/03/2026
Customers, sales and distribution We sell our products to over 100,000 customers.
Business / Customers, sales and distribution / customer count · Filed 06/02/2026
Our customer base is diverse, with about half of our revenue derived from customers outside of our largest 50.
Business / Customers, sales and distribution / diversification · Filed 06/02/2026
During 2025, we invested $3.94 billion in R&D and SG&A, invested $4.55 billion in capital expenditures and returned $6.48 billion to shareholders.
MD&A / Overview / 2025 investment and shareholder returns · Filed 06/02/2026
For Years Ended December 31, 2025 2024 Cash flow from operations (GAAP) * $ 7,153 $ 6,318 Capital expenditures (4,550) (4,820) Proceeds from CHIPS Act incentives 335 — Free cash flow (non-GAAP) $ 2,938 $ 1,498 Revenue $ 17,682 $ 15,641 Cash flow from operations as a percentage of revenue (GAAP) 40.5 % 40.4 % Free cash flow as a percentage of revenue (non-GAAP) 16.6 % 9.6 % * Includes cash benefits of $335 million and $588 million from the CHIPS Act ITC used to reduce income taxes payable for 2025 and 2024, respectively.
MD&A / Non-GAAP reconciliation / operating cash flow and capital expenditures · Filed 06/02/2026
4 For Six Months Ended Consolidated Statements of Cash Flows June 30, (In millions) 2026 2025 Cash flows from operating activities Net income $ 3,525 $ 2,474 Adjustments to net income: Depreciation 1,088 884 Amortization of capitalized software 42 41 Stock compensation 236 245 Gains on sales of assets (13) — Deferred taxes (66) (137) Increase (decrease) from changes in: Accounts receivable (557) (215) Inventories 199 (285) Prepaid expenses and other current assets (7) (16) Accounts payable and accrued expenses (24) (29) Accrued compensation (305) (255) Income taxes payable 116 61 Changes in funded status of retirement plans 7 (27) Other (18) (32) Cash flows from operating activities 4,223 2,709 Cash flows from investing activities Capital expenditures (1,190) (2,428) Proceeds from U.S.
Financial statements / First-half 2026 cash flows / operations and capital expenditures · Filed 24/07/2026
CHIPS and Science Act (CHIPS Act) incentives 1,104 260 Proceeds from asset sales 37 — Purchases of short-term investments (3,342) (1,839) Proceeds from short-term investments 1,679 3,938 Other (37) (13) Cash flows from investing activities (1,749) (82) Cash flows from financing activities Proceeds from issuance of long-term debt — 1,199 Repayment of debt — (750) Dividends paid (2,586) (2,473) Stock repurchases (185) (955) Proceeds from common stock transactions 754 233 Other (22) (37) Cash flows from financing activities (2,039) (2,783) Net change in cash and cash equivalents 435 (156) Cash and cash equivalents at beginning of period 3,225 3,200 Cash and cash equivalents at end of period $ 3,660 $ 3,044 Supplemental cash flow information Investment tax credit (ITC) used to reduce income taxes payable $ 301 $ 203 Proceeds from CHIPS Act incentives 1,104 260 Total cash benefit related to the CHIPS Act $ 1,405 $ 463 See accompanying notes.
Financial statements / First-half 2026 cash flows / incentives and financing · Filed 24/07/2026
Financial statements For Three Months Ended For Six Months Ended Consolidated Statements of Income June 30, June 30, (In millions, except per-share amounts) 2026 2025 2026 2025 Revenue $ 5,463 $ 4,448 $ 10,288 $ 8,517 Cost of revenue (COR) 2,111 1,873 4,137 3,629 Gross profit 3,352 2,575 6,151 4,888 Research and development (R&D) 535 527 1,045 1,044 Selling, general and administrative (SG&A) 490 485 954 957 Acquisition charges 17 — 34 — Operating profit 2,310 1,563 4,118 2,887 Other income (expense), net (OI&E) 69 48 116 128 Interest and debt expense 141 133 282 261 Income before income taxes 2,238 1,478 3,952 2,754 Provision for income taxes 258 183 427 280 Net income $ 1,980 $ 1,295 $ 3,525 $ 2,474 Earnings per common share (EPS): Basic $ 2.16 $ 1.42 $ 3.85 $ 2.71 Diluted $ 2.14 $ 1.41 $ 3.82 $ 2.69 Average shares outstanding: Basic 912 908 911 909 Diluted 920 912 917 914 A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents.
Financial statements / Income / earnings and average shares · Filed 24/07/2026
As announced on February 4, 2026, we have entered into a definitive agreement to acquire Silicon Labs for $231.00 per share in an all-cash transaction, representing a total enterprise value of approximately $7.5 billion.
MD&A / Overview / pending acquisition agreement · Filed 24/07/2026
In June 2026, we entered into a 364-day delayed draw term loan credit facility for borrowings up to $5 billion to support the Silicon Labs acquisition consideration and related transaction expenses.
Notes / Debt and lines of credit / acquisition financing facility · Filed 24/07/2026
◦In January 2025, Mr. Ilan received an equity compensation award with a grant date fair value of $18 million in order to align his equity compensation with the projected market range for similarly situated CEOs in the Comparator Group.
Executive compensation / CEO / actual January 2025 equity award · Filed 04/03/2026
Restricted stock units have a four-year cliff vest schedule in order to support retention of our executives.
Executive compensation / Equity terms / four-year cliff vesting · Filed 04/03/2026
It is against TI policy for any employee, including an executive officer, or director to engage in trading in “puts” (options to sell at a fixed price), “calls” (similar options to buy) or other options or hedging techniques on TI stock specifically designed to limit losses on TI stock or equity compensation held by the employee or director.
Corporate governance / Policy against hedging · Filed 04/03/2026
Under the policy, in the event the company is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under securities laws, the committee shall seek to recover incentive-based compensation received by any executive officer during the three fiscal years immediately preceding the date that such a restatement is required in excess of the amount of incentive-based compensation that otherwise would have been received by the executive officer had such compensation been determined based on the restated financial results.
Executive compensation / Recoupment policy · Filed 04/03/2026
In assessing performance and compensation decisions, the committee does not use formulas, thresholds or multiples.
Executive compensation / Discretionary assessment · Filed 04/03/2026
2025 Absolute Performance 2025 Relative Performance * Revenue Growth: Total TI 13.0% Above median Profit from Operations as a % of Revenue (Operating Profit Margin) 34.1% Above median Total Shareholder Return (TSR) -4.5 % Below median Assessment of Strategic Progress Strengthened strategic position in 2025 Year-on-Year Change in Bonus for NEOs (2025 Bonus Compared with 2024) 10% increase * Relative to Semiconductor Peers; includes estimates and projections of certain peer companies’ financial results.
Executive compensation / Performance assessment and bonus increase · Filed 04/03/2026
Employment Termination due to Death or Permanent Disability or at Least Six Months after Grant When Retirement Eligible * Employment Termination for Cause Other Circumstances of Employment Termination Unexercisable portion of option Continues Stops Stops Exercisable portion of option Remains exercisable to end of term Terminates Remains exercisable for 30 days * Retirement eligibility is defined for purposes of equity awards as at least age 55 with 10 or more years of TI service or at least age 65.
Executive compensation / Outstanding options / retirement vesting provisions · Filed 04/03/2026
Board leadership structure The board’s current leadership structure combines the positions of chairman and CEO and includes a lead director who presides at executive sessions and performs the duties listed below.
Corporate governance / Combined chairman and CEO · Filed 04/03/2026
In addition, the lead director has authority to call meetings of the independent directors.
Corporate governance / Lead-director authority · Filed 04/03/2026
No executive officer determines his or her own compensation or the compensation of any other executive officer.
Corporate governance / Executive compensation decision authority · Filed 04/03/2026
These practices include: •Special meetings may be called by stockholders who collectively hold 25% or more of our outstanding stock; •Our by-laws provide a “proxy access” right that conforms to market practice; •Annually elected board; •Majority vote standard for uncontested director elections; and •Robust stockholder engagement throughout the year.
Stockholder rights / Annual elections and majority voting · Filed 04/03/2026
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 6, 2026, expressed an unqualified opinion thereon.
Independent auditor report / Internal-control opinion · Filed 06/02/2026
During the periods presented, there have been no material accruals or payments regarding product warranty or product liability.
Notes / Warranty costs and product liabilities / actual claims experience · Filed 24/07/2026
Days of inventory for the second quarter of 2026 were 196 compared with 222 at the end of 2025, which reflects the continued execution of our inventory strategy.
MD&A / Inventory / days of inventory · Filed 24/07/2026
In the comparison of relative performance, the committee used the following companies (the “Semiconductor Peers”): Advanced Micro Devices, Inc.
Executive compensation / Semiconductor peer comparison · Filed 04/03/2026
NXP Semiconductors N.V. Analog Devices, Inc.
Executive compensation / Semiconductor peer comparison · Filed 04/03/2026
