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Stock Analyst Update

Don't Mess with Texas Instruments

Chipmaker aims to boost dominance in hot-growth markets.


Texas Instruments (TXN) stock sports a Texas-size price/earnings ratio, but with good reason. It continues to be a dominant player in the fast-growing wireless-telecom industry, and it has plenty of growth opportunities outside that area, the company told analysts Thursday. 

Texas Instruments’ market share for digital signal processing, or DSP, chips increased to 48% last year, giving it twice the market share of its closest competitor, Lucent Technologies (LU). Such dominance in this industry is vital to the company's success, because such chips are a key component in cellular phones and other wireless technologies. With the market for DSPs growing between 25% and 30% per year, Texas Instruments should continue to post solid growth as the market for wireless devices continues to explode.

Jeremy Lopez does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.