According to the Wall Street Journal, some of the most popular devices in the digital age are analog semiconductors, which include equipment manufactured by the 91-year-old Texas Instruments Company, which is known to consumers for the calculators it has been producing since the 1970s.
Texas Instruments
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Technology executives say this year's supply chain bottlenecks have affected everything from the iPhone to the Ford F-150, particularly in analog chips. Analog chips process input temperature, sound, and current information more like humans, with many layers.
One of the largest analog chip manufacturers is Texas Instruments, founded in 1930. Students and engineers know about Texas Instruments because it produces handheld calculators that are still in production today. But its $170 billion in market capital is built on its dominance in analog chips. According to TrendForce, Texas Instruments has a 17 to 20 percent share of the world analog chip market this year.
While precision digital chip makers like Intel and Samsung have gained most of the exposure, the lack of a few dollars a piece of analog chips could hamper the supply chain for products that sell tens of billions of dollars.
Left: Top five companies by analog integrated circuit revenue in 2020 (Source: IC Insights);
Right: High demand for analog chips has caused Texas Instruments to climb its stock price since the pandemic (Source: FactSet)
Source: The Wall Street Journal
Apple CEO Tim Cook spoke about Apple's lost sales opportunity during an October earnings call. Because of the shortage of parts, Apple can't produce enough iPhones and other devices.
In addition to Texas Instruments, major analog chip manufacturers include Analog Devices, Infineon and STMicroelectronics.
Industry executives and analysts say Texas Instruments has similar problems with other companies in meeting demand, but because of its industry leadership, it tends to receive more attention.
Texas Instruments said it was doing its best to serve its customers and acknowledged that some customers weren't getting all the products they wanted. On the inventory side, "Obviously, we're well below what we want to achieve," Texas Instruments CFO Rafael Lizardi said on an October earnings call.
Texas Instruments' new capacity under construction is said to require tens of billions of dollars in investment, and construction will begin next year at two plants in Sherman, Texas.
However, due to the industry's boom-and-bust cycle, analog chipmakers have been cautious about expansion. Texas Instruments executives have said they want to take customer needs seriously. (Proofreading | Value）