# Texas Instruments Moat

Status: published. Policy: company-analysis-1.

Texas Instruments has a current manufacturing cost advantage supported by operating 300mm capacity, owned process technology and substantial replication costs, plus more limited switching friction from customers’ embedded-software investments. Portfolio breadth and direct customer reach reinforce these advantages. A wide moat is not established: relative competitor costs are missing, utilization affects economics, multiyear growth is mixed, and realized pricing power is unproven. Recent improvement principally reflects demand and operating leverage.

## cost_advantage

Operating 300mm manufacturing and owned process and packaging technology support lower production costs and supply control. TI reports approximately 40% lower chip costs on 300mm versus 200mm wafers; this is an issuer comparison between manufacturing formats, not demonstrated superiority over every competitor.

Durability: Existing facilities, production qualifications and the time and money needed to replicate manufacturing support persistence. Broad products and customer reach help spread investment. Further factory ramps and increased internal sourcing remain potential extensions rather than fully realized benefits.

Risks: Underutilization can offset unit-cost benefits. Capacity expansion already increased manufacturing costs. Competitors can improve processes or obtain subsidies; technological change and pricing competition may erode the advantage.

Invalidation: The thesis would weaken materially if comparable-product costs ceased to favor TI’s production approach, or if persistently low utilization and expansion costs prevented existing capacity from producing economic benefits through a demand recovery.

Competitors: Not established
## switching_costs

Customers’ prior software-development investments create switching friction in Embedded Processing. The disclosed mechanism is credible but does not establish company-wide customer lock-in or quantified replacement costs.

Durability: Software investment can favor continued use of an existing platform. Similar disclosures in the 2023 and 2025 annual reports show continuity of the mechanism, although neither establishes retention rates or its economic magnitude.

Risks: Competing technology, software support and lower prices may justify migration. Embedded demand growth does not distinguish retained customers from new customers or cyclical recovery.

Invalidation: Evidence of customers routinely migrating embedded designs with little software rework, or sustained losses of existing platform business despite competitive products and supply, would undermine this advantage.

Competitors: Not established
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