Texas Instruments continues to dominate industrial chip market: report

Texas Instruments continues to lead the industrial electronic chip market, but revenue grew by nearly a quarter in just one year.
Written by Rachel King, Contributor

Texas Instruments is reportedly finding more success as it leads in the industrial electronic chip market, according to a new report from market intelligence firm IHS iSuppli.

For reference, industrial electronics chips are typically integrated in technology for industries such as energy, military and civil aerospace, manufacturing, and medical electronic production, among others.

The semiconductor manufacturer claimed the top spot in 2011 overall with 7.3 percent fo the market share -- up from 6.4 percent the year before.

But was might be really noteworthy is that TI's revenue from industrial chips has grown considerably to $2.2 billion, a 24.9 percent increase from $1.8 billion.

In 2011, TI was trailed by Infineon, STMicroelectronics, Intel, and Analog Devices, respectively, to round out the top five in the market.

Even though Texas Instruments was also the leader in 2011, there might be another reason why TI's revenue, in particular, grew so much in one year. Jacobo Carrasco-Heres, an analyst for industrial electronics at IHS, explained in the report that "TI owed its boost in revenue last year to the firm’s acquisition of National Semiconductor at the end of the third quarter in 2011, which added $446 million to TI’s bottom line for industrial electronics."

"Without the buyout, TI’s revenue growth would have been flat," he added. Prior to the acquisition, National Semiconductor was ranked as the No. 2 supplier of LED driver integrated circuits behind TI, which paid $6.5 billion for its closest competitor.

IHS's report follows TI's announcement earlier this week that it cut its third quarter outlook due to problems with another realm in the company: wireless. The cutback comes as a result of the wireless unit struggling as customers pulled back on orders amid economic worries.

For the third quarter, Texas Instruments is projecting third quarter earnings between 34 cents a share and 42 cents a share with revenue falling between $3.21 billion and $3.47 billion. But Wall Street is expecting TI to report earnings of at least 50 cents a share on revenue of $3.54 billion.

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