⚠ The Diversification Is About Customers, Not ProductsModerate threat

Texas Instruments (TXN) — threat to the moat

All six end markets and all hundred thousand customers turn at the same time, because they are buying the same category of part.

Seventy-nine percent of the revenue is one segment, and the diversification argument is about customers rather than products.

The 2023-24 downturn, across the whole business$20.03bnRevenue 2022$15.64bn -22%Revenue 2024$10.14bnOperating profit 2022$5.47bn -46%Operating profit 2024Six end markets, 100,000 customers, and all of them slowed at the same time.
Customer diversification does not diversify a cycle that lives in the product.

Analog was $14.01 billion of $17.68 billion in 2025, with Embedded Processing at $2.70 billion and Other around $1.0 billion.1 TI's four stated competitive advantages include the diversity and longevity of its products, markets and customer positions — and on products, the concentration is severe.2

When the analog cycle turns, all six end markets and all 100,000 customers turn together, because they are buying the same category of part for the same reason. That is what 2023-24 showed: revenue down 22% and operating profit down 46%, across the whole business at once.3

Embedded Processing has been the weaker half through the downturn and is recovering more slowly — up 16% year over year in the June 2026 quarter against Analog's 26%.4

The concentration is therefore getting slightly worse rather than better.

The measure is peak-to-trough revenue decline. Customer diversification does not smooth it; only genuine product diversification would, and TI does not have that.

References
  1. ReportedAnalog was $14.01 billion of $17.68 billion in 2025, with Embedded Processing at $2.70 billion and Other around $1.0 billion.
    Texas Instruments Incorporated, Form 10-K FY2025 — consolidated statements of income and segment results. Revenue $17,682M, up $2.04bn or 13.0%; gross profit $10,081M; operating profit $6,023M; other income net $230M; interest and debt expense $543M; income before income taxes $5,710M; provision for income taxes $709M at an effective rate of 12.4% (12.0% in 2024); net income $5,001M against $4,799M in 2024 and $6,510M in 2023. Basic EPS $5.47 and diluted EPS $5.45, against $5.20 and $7.07 in the two prior years, on 913 million diluted shares. By segment, Analog revenue $14,006M (2024 $12,161M, +15%) with operating profit $5,412M (2024 $4,608M, +17%) at 38.6% of revenue (37.9%); Embedded Processing $2,700M; Other the remainder. Revenue peaked at $20,028M in 2022 with operating profit of $10,140M, and troughed at $15,641M in 2024 with operating profit of $5,465M. — FY2025 · publ. 2026-02-06 · source ↗
  2. ReportedAnalog was $14.01 billion of $17.68 billion in 2025, with Embedded Processing at $2.70 billion and Other around $1.0 billion. TI's four stated competitive advantages include the diversity and longevity of its products, markets and customer positions — and on products, the concentration is severe.
    Texas Instruments Incorporated, Form 10-K FY2025 — consolidated statements of income and segment results. Revenue $17,682M, up $2.04bn or 13.0%; gross profit $10,081M; operating profit $6,023M; other income net $230M; interest and debt expense $543M; income before income taxes $5,710M; provision for income taxes $709M at an effective rate of 12.4% (12.0% in 2024); net income $5,001M against $4,799M in 2024 and $6,510M in 2023. Basic EPS $5.47 and diluted EPS $5.45, against $5.20 and $7.07 in the two prior years, on 913 million diluted shares. By segment, Analog revenue $14,006M (2024 $12,161M, +15%) with operating profit $5,412M (2024 $4,608M, +17%) at 38.6% of revenue (37.9%); Embedded Processing $2,700M; Other the remainder. Revenue peaked at $20,028M in 2022 with operating profit of $10,140M, and troughed at $15,641M in 2024 with operating profit of $5,465M. — FY2025 · publ. 2026-02-06 · source ↗
  3. ReportedThat is what 2023-24 showed: revenue down 22% and operating profit down 46%, across the whole business at once.
    Texas Instruments Incorporated, Form 10-K FY2025 — consolidated statements of income and segment results. Revenue $17,682M, up $2.04bn or 13.0%; gross profit $10,081M; operating profit $6,023M; other income net $230M; interest and debt expense $543M; income before income taxes $5,710M; provision for income taxes $709M at an effective rate of 12.4% (12.0% in 2024); net income $5,001M against $4,799M in 2024 and $6,510M in 2023. Basic EPS $5.47 and diluted EPS $5.45, against $5.20 and $7.07 in the two prior years, on 913 million diluted shares. By segment, Analog revenue $14,006M (2024 $12,161M, +15%) with operating profit $5,412M (2024 $4,608M, +17%) at 38.6% of revenue (37.9%); Embedded Processing $2,700M; Other the remainder. Revenue peaked at $20,028M in 2022 with operating profit of $10,140M, and troughed at $15,641M in 2024 with operating profit of $5,465M. — FY2025 · publ. 2026-02-06 · source ↗
  4. ReportedEmbedded Processing has been the weaker half through the downturn and is recovering more slowly — up 16% year over year in the June 2026 quarter against Analog's 26%.
    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