★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
VOL. XCIV, NO. 247
Texas Instruments Incorporated
TXN · Nasdaq Global Select Market
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Texas Instruments is a semiconductor IDM focused on analog ICs and embedded processors, with Analog contributing about 79% of FY2025 revenue and nearly 90% of segment operating profit. Its key advantages are internal 300mm manufacturing that reduces unit costs, plus supply-chain control from in-house capacity expansion. A large direct sales footprint (including TI.com) improves customer reach and design-win access; in 2025, more than 80% of revenue was direct. Embedded products also benefit from customer software investment that increases switching costs across product generations. The smaller Other segment includes DLP components, calculators, and selected custom/legacy activity with niche IP and education-ecosystem defaults, but those positions face substitution risk.
Primary segment
Analog
Market structure
Competitive
Market share
14%-17% (implied)
HHI: —
Coverage
3 segments · 7 tags
Updated 2026-06-03
Segments
Analog
Analog semiconductors (power management and signal chain ICs)
Revenue
79.2%
Structure
Competitive
Pricing
moderate
Share
14%-17% (implied)
Peers
Embedded Processing
Embedded microcontrollers and processors (industrial and automotive)
Revenue
15.3%
Structure
Competitive
Pricing
moderate
Share
—
Peers
Other
DLP projection components, calculators, and selected custom and legacy semiconductors
Revenue
5.5%
Structure
Competitive
Pricing
moderate
Share
—
Peers
Moat Claims
Analog
Analog semiconductors (power management and signal chain ICs)
Revenue_share and operating_profit_share are computed from FY2025 Form 10-K segment information: Analog revenue $14.006B of $17.682B total; Analog operating profit $5.412B of $6.023B total operating profit.
Scale Economies Unit Cost
Supply
Scale Economies Unit Cost
Strength
Durability
Confidence
Evidence
TI emphasizes structural cost advantage from advanced 300mm capacity; 300mm wafers materially lower unit costs vs 200mm.
Scale Economies Unit Cost moat: definition, examples, and stocks
Erosion risks
- Competitors migrate more analog output to 300mm or achieve similar structural cost positions
- Underutilization during downturns offsets unit-cost advantage via higher depreciation per unit
Leading indicators
- 300mm wafer output mix (internal disclosures or capex updates)
- Gross margin vs peers across the cycle
- Depreciation and factory loading commentary on earnings calls
Counterarguments
- Analog pricing is competitive; cost advantage may be competed away in commoditized categories.
- Large fixed-cost base can hurt margins if demand stays weak and utilization falls.
Supply Chain Control
Supply
Supply Chain Control
Strength
Durability
Confidence
Evidence
Mostly in-house manufacturing increases control over supply and provides geopolitically dependable capacity for customers.
Supply Chain Control moat: definition, examples, and stocks
Erosion risks
- Export controls or equipment bottlenecks delay planned capacity expansions
- Natural disasters or operational incidents at key fabs
Leading indicators
- Internal sourcing percentage over time
- Customer lead-time stability vs industry
- Geopolitical and trade restrictions affecting equipment or materials
Counterarguments
- Foundry-based competitors can sometimes access leading nodes without owning fabs.
- Customers may still multi-source critical components regardless of TI capacity.
Distribution Control
Supply
Distribution Control
Strength
Durability
Confidence
Evidence
Large direct sales footprint and TI.com increase reach into more customers and design projects, supporting share-of-wallet expansion.
Distribution Control moat: definition, examples, and stocks
Erosion risks
- Distributors and marketplaces reduce the uniqueness of direct channels
- Large OEMs consolidate purchasing and push for pricing concessions
Leading indicators
- Direct revenue mix over time
- TI.com transaction volume and customer count disclosures
- Design-win pipeline commentary
Counterarguments
- Peers can also build digital storefronts and leverage global distributors.
- Multi-sourcing strategies limit channel-driven lock-in for large customers.
Scope Economies
Supply
Scope Economies
Strength
Durability
Confidence
Evidence
Breadth of the analog catalog supports cross-selling across the signal chain and power tree within a customers design.
Scope Economies moat: definition, examples, and stocks
Erosion risks
- Best-of-breed point solutions win despite breadth
- System integrators standardize on alternative vendor ecosystems
Leading indicators
- Revenue per customer and per design-win disclosures
- Catalog attach rates in industrial and automotive designs (qualitative)
- Competitive win and loss trends in key power and signal-chain categories
Counterarguments
- Breadth does not ensure leadership in every category; customers may mix vendors.
- Cross-selling benefits may be less meaningful for highly price-sensitive designs.
Embedded Processing
Embedded microcontrollers and processors (industrial and automotive)
Revenue_share and operating_profit_share are computed from FY2025 Form 10-K segment information: Embedded Processing revenue $2.697B of $17.682B total; Embedded Processing operating profit $304M of $6.023B total operating profit.
Training Org Change Costs
Demand
Training Org Change Costs
Strength
Durability
Confidence
Evidence
Customer firmware and software investment increases switching and extends product relationships across generations.
Training Org Change Costs moat: definition, examples, and stocks
Erosion risks
- Standardized architectures and toolchains reduce platform-specific switching costs
- Competitors subsidize migration with better tools, middleware, or pricing
Leading indicators
- SDK and tool adoption and developer engagement (downloads, forums, communities)
- Design-win churn (qualitative) in industrial and automotive MCU sockets
- Pricing pressure and ASP trends vs peers
Counterarguments
- Portability layers and open-source middleware can make firmware less sticky to a single vendor.
- Some customers intentionally multi-source MCUs to reduce vendor dependence.
Scale Economies Unit Cost
Supply
Scale Economies Unit Cost
Strength
Durability
Confidence
Evidence
Embedded products benefit from TI's internal manufacturing scale and 300mm structural cost advantage, though benefit varies by node and mix.
Scale Economies Unit Cost moat: definition, examples, and stocks
Erosion risks
- Mix shifts toward processes where 300mm advantage is less relevant
- Foundry costs decline or competitors secure better foundry economics
Leading indicators
- Embedded gross margin trend vs analog and vs peers
- Factory loading and depreciation commentary
- External foundry usage trend
Counterarguments
- Leading-edge foundries can offer competitive cost and performance without owning fabs.
- Cost advantage may be less decisive when software ecosystem drives selection.
Distribution Control
Supply
Distribution Control
Strength
Durability
Confidence
Evidence
Same direct-channel reach (including TI.com) helps penetrate more embedded design starts and support customers through long design cycles.
Distribution Control moat: definition, examples, and stocks
Erosion risks
- Distributors and online platforms provide similar reach for peers
- OEM consolidation concentrates buying power
Leading indicators
- Direct revenue mix and online engagement metrics
- Embedded design-win momentum (qualitative)
- Customer support satisfaction and responsiveness
Counterarguments
- Channel reach is not exclusive; competitors can match with strong field apps support.
- Large automotive and industrial OEMs often have entrenched preferred vendor lists.
Other
DLP projection components, calculators, and selected custom and legacy semiconductors
Revenue_share and operating_profit_share are computed from FY2025 Form 10-K segment information: Other revenue $979M of $17.682B total; Other operating profit $307M of $6.023B total operating profit. DLP/calculator moat evidence is retained because it remains the latest direct support for those niche claims.
IP Choke Point
Legal
IP Choke Point
Strength
Durability
Confidence
Evidence
DLP and DMD are TI-originated technologies with long-running product innovation and supporting IP, creating a defensible niche component position in projection applications.
IP Choke Point moat: definition, examples, and stocks
Erosion risks
- Substitution by alternative projection and display technologies (LCD, LCOS, LED microdisplays)
- IP expiration and commoditization pressure margins
Leading indicators
- Adoption trends in DLP-enabled projection (cinema, industrial, automotive HUD)
- Design wins in emerging DLP applications (e.g., sensing and automotive)
- Competitive tech adoption (LCD and LCOS share) in projection markets
Counterarguments
- Many projection systems can substitute other optical architectures without using DLP.
- Niche scale limits ability to out-invest larger display ecosystems.
Habit Default
Demand
Habit Default
Strength
Durability
Confidence
Evidence
Graphing calculator usage is entrenched in curricula and standardized testing ecosystems, reinforcing default choice dynamics in K-12 education.
Habit Default moat: definition, examples, and stocks
Erosion risks
- Exam policy shifts toward embedded and online calculators reduce hardware requirement
- Free web and mobile tools (e.g., Desmos) increase substitution pressure
Leading indicators
- SAT and ACT and state testing calculator policy changes
- Adoption of online calculator tools in classrooms and assessments
- Unit volumes and ASP trends in the education segment
Counterarguments
- If testing platforms standardize on online tools, default advantage can unwind quickly.
- Students may shift to multi-purpose devices, reducing willingness to buy dedicated hardware.
Evidence
An unpackaged chip built on a 300mm wafer costs about 40% less than an unpackaged chip built on a 200mm wafer.
Direct cost-curve claim supporting unit-cost scale advantage for analog.
creating a competitive manufacturing structural cost advantage by investing in our 300mm capacity
Reinforces that 300mm investment is central to sustained structural cost advantage.
lower manufacturing costs and greater control of our supply chain, offering our customers geopolitically dependable capacity.
Explicit link between internal manufacturing, control, and customer value (dependable capacity).
In 2025, we sourced the majority of our wafer fabrication, as well as assembly and test, internally.
Supports claim that TI's supply chain control is current and substantial (not just aspirational).
We sell our products to over 100,000 customers.
Supports breadth of customer reach.
Showing 5 of 16 sources.
Risks & Indicators
Erosion risks
- Competitors migrate more analog output to 300mm or achieve similar structural cost positions
- Underutilization during downturns offsets unit-cost advantage via higher depreciation per unit
- Export controls or equipment bottlenecks delay planned capacity expansions
- Natural disasters or operational incidents at key fabs
- Distributors and marketplaces reduce the uniqueness of direct channels
- Large OEMs consolidate purchasing and push for pricing concessions
Leading indicators
- 300mm wafer output mix (internal disclosures or capex updates)
- Gross margin vs peers across the cycle
- Depreciation and factory loading commentary on earnings calls
- Internal sourcing percentage over time
- Customer lead-time stability vs industry
- Geopolitical and trade restrictions affecting equipment or materials
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