Nobody Big Enough to Argue About PriceWide moat

Texas Instruments (TXN) — moat facet

No customer is big enough to argue about price, which is why TI could start raising prices without a negotiation that mattered.

A hundred thousand customers who cannot individually negotiate is a pricing position, and TI has just started using it.

Who can argue about priceQualcommThree customers above 10%Qualcomm's filing saysPurchasing power may lower pricesTINo customer above 10%TI in Q3 2026Raised prices customer by customerA supplier with three large customers negotiates. One with 100,000 informs.
What the absence of concentration is actually worth, demonstrated.

After holding pricing flat through the first half of 2026, TI began executing customer-by-customer price increases from the third quarter, extending into the fourth quarter and into 2027, concentrated in Analog.1 Reports place it as one of several such moves across the industry within six months, with Chinese analog manufacturers following.2

That sequence is only available to a company with this customer structure. A supplier with three customers above 10% of revenue negotiates; a supplier with more than 100,000 customers and none above the disclosure threshold informs.3 Qualcomm's filing states the opposite case explicitly — that its customers' purchasing power may result in lower prices for its products.

The financial effect compounds with the utilisation recovery already under way. Gross margin went from 57.0% in 2025 to 61.4% in the June 2026 quarter on volume before any of the increases landed.45

The constraint is competitive rather than structural: prices rise where a Chinese alternative does not exist, which is why the increases are concentrated in Analog rather than across the commodity end.

Watch gross margin over the next three quarters. It is where the increases either stick or do not.

Moat trajectory: Widening

TI began customer-by-customer price increases from the third quarter of 2026 without a negotiation that mattered anywhere — the practical demonstration of what no customer concentration is worth.

The number that tests this moat
Reported
Analog operating profit growth
+50% to $1,992M in Q2 2026

With no dominant customer, TI can raise prices without a single negotiation deciding the outcome. Profit growing twice as fast as revenue shows pricing holding; a gap that closes after the Q3 increases would show customers pushing back.

Source: Texas Instruments Form 10-Q, Q2 2026 ↗
References
  1. ReportedAfter holding pricing flat through the first half of 2026, TI began executing customer-by-customer price increases from the third quarter, extending into the fourth quarter and into 2027, concentrated in Analog.
    Coverage of Texas Instruments' second-quarter 2026 results, July 2026 — revenue of $5.46 billion, up 23% year over year and 13% sequentially against consensus near $5.24 billion; net income of $1.98 billion, up 53%, and EPS of $2.14, up 52% and above the high end of guidance. By segment, Analog revenue was $4.37 billion (up 26%), Embedded Processing $788 million (up 16%) and Other $310 million (down 2%). Industrial revenue grew more than 30% year over year across all sectors and regions, automotive re-accelerated, and data centre revenue roughly doubled. Management guided third-quarter revenue to $5.65-6.15 billion and confirmed 2026 capital expenditure of $2-3 billion, declining to bias the range toward the lower end. After holding pricing flat through the first half, TI began executing customer-by-customer price increases from the third quarter, extending into the fourth quarter and into 2027, concentrated in Analog. Management has framed free cash flow per share of $8 or more as probable for 2026, having earlier suggested $12. The shares fell after hours. — Q2 2026 · publ. 2026-07-24 · source ↗
  2. ReportedAfter holding pricing flat through the first half of 2026, TI began executing customer-by-customer price increases from the third quarter, extending into the fourth quarter and into 2027, concentrated in Analog. Reports place it as one of several such moves across the industry within six months, with Chinese analog manufacturers following.
    Coverage of Texas Instruments' second-quarter 2026 results, July 2026 — revenue of $5.46 billion, up 23% year over year and 13% sequentially against consensus near $5.24 billion; net income of $1.98 billion, up 53%, and EPS of $2.14, up 52% and above the high end of guidance. By segment, Analog revenue was $4.37 billion (up 26%), Embedded Processing $788 million (up 16%) and Other $310 million (down 2%). Industrial revenue grew more than 30% year over year across all sectors and regions, automotive re-accelerated, and data centre revenue roughly doubled. Management guided third-quarter revenue to $5.65-6.15 billion and confirmed 2026 capital expenditure of $2-3 billion, declining to bias the range toward the lower end. After holding pricing flat through the first half, TI began executing customer-by-customer price increases from the third quarter, extending into the fourth quarter and into 2027, concentrated in Analog. Management has framed free cash flow per share of $8 or more as probable for 2026, having earlier suggested $12. The shares fell after hours. — Q2 2026 · publ. 2026-07-24 · source ↗
  3. ReportedA supplier with three customers above 10% of revenue negotiates; a supplier with more than 100,000 customers and none above the disclosure threshold informs.
    Texas Instruments Incorporated, Form 10-K for the year ended 31 December 2025 (SEC, CIK 97476) — Item 1, Business. TI's two reportable segments are Analog and Embedded Processing, with remaining activities in Other; operations began in 1930 and it has design, manufacturing or sales operations in more than 30 countries. The product portfolio includes more than 80,000 products. TI states four sustainable competitive advantages: a strong foundation of manufacturing and technology, a broad portfolio of analog and embedded processing products, the reach of its market channels, and the diversity and longevity of its products, markets and customer positions, which in combination it describes as difficult to replicate. An unpackaged chip built on a 300mm wafer costs about 40% less than one built on a 200mm wafer; TI continued qualifying and ramping production at its newest 300mm fabs in Richardson and Sherman, Texas, and Lehi, Utah, supporting external foundry transfers and internal transfers from its legacy 150mm facilities, and expects to maintain sufficient internal capacity to meet the majority of its production needs, offering customers geopolitically dependable capacity. TI sells to over 100,000 customers, with about half of revenue derived from customers outside its largest 50; more than 80% of revenue was direct in 2025, including TI.com. End markets as a percentage of 2025 revenue: industrial 33%, automotive 33%, personal electronics 21%, data centre 9%, communications equipment 3%, and calculators about 1%. About 60% of revenue comes from customers headquartered outside the United States; revenue from end customers headquartered in China represented about 20% of revenue in 2025, while revenue from products shipped into China represented about 50%. The analog and embedded processing markets remain highly fragmented, with significant global competition from dozens of large and small companies including emerging companies, particularly in Asia. The company's stated objective is the growth of free cash flow per share over the long term. — FY2025 · publ. 2026-02-06 · source ↗
  4. ReportedGross margin went from 57.0% in 2025 to 61.4% in the June 2026 quarter on volume before any of the increases landed.
    Texas Instruments Incorporated, Form 10-Q for the quarter ended 30 June 2026 (SEC, CIK 97476). Revenue $5,463M against $4,448M a year earlier, and $10,288M for the six months against $8,517M; cost of revenue $2,111M; gross profit $3,352M against $2,575M — a 61.4% gross margin against 57.9%; research and development $535M against $527M; selling, general and administrative $490M against $485M; acquisition charges $17M; operating profit $2,310M against $1,563M. Income before income taxes $2,238M; provision for income taxes $258M; net income $1,980M against $1,295M. Basic EPS $2.16 and diluted EPS $2.14, against $1.42 and $1.41, on 920 million diluted shares. — Q2 2026 · publ. 2026-07-24 · source ↗
  5. ReportedGross margin went from 57.0% in 2025 to 61.4% in the June 2026 quarter on volume before any of the increases landed.
    Texas Instruments Incorporated, Form 10-Q for the quarter ended 30 June 2026 (SEC, CIK 97476). Revenue $5,463M against $4,448M a year earlier, and $10,288M for the six months against $8,517M; cost of revenue $2,111M; gross profit $3,352M against $2,575M — a 61.4% gross margin against 57.9%; research and development $535M against $527M; selling, general and administrative $490M against $485M; acquisition charges $17M; operating profit $2,310M against $1,563M. Income before income taxes $2,238M; provision for income taxes $258M; net income $1,980M against $1,295M. Basic EPS $2.16 and diluted EPS $2.14, against $1.42 and $1.41, on 920 million diluted shares. — Q2 2026 · publ. 2026-07-24 · source ↗
Sources
Generated September 23, 2026