Embedded ProcessingThin moat

Texas Instruments (TXN) — moat facet

A decade without growth and a margin that fell from 38% to 11% before the first recovery.

Embedded Processing is TI's second segment and its weakest. It had revenue of $2,697 million in 2025 and operating profit of $304 million, a margin of 11.3%.1 Three years earlier it earned $1,253 million on $3,261 million, 38.4%.2

Embedded Processing operating margin (%)27.0%201632.7%201733.9%201830.8%201928.9%202038.5%202138.4%202229.9%202313.9%202411.3%202521.3%Q22026Texas Instruments Forms 10-K FY2018-FY2025 and Q2 2026 10-Q
From 38% to 11% in three years, and the first recovery in 2026.

It sells microcontrollers and processors, the chips that run a device's software. The filing notes that customers often invest their own research and development in software that runs on these products, which makes the relationships long, because they prefer to reuse that software from one generation to the next.3 Sales of Embedded Processing products were about 15% of TI's revenue in 2025.4

It has not grown in a decade. Revenue was $3,023 million in 2016, peaked at $3,554 million in 2018, fell to $2,570 million in 2020 and was $2,697 million in 2025.567 Its best margins came in 2021 and 2022, 38.5% and 38.4%.8

The margin collapse came after the revenue fall. Revenue dropped about 24.8% in 2024 and the margin fell from 29.9% to 13.9%; in 2025 revenue rose 6% and operating profit still fell 14%, which the filing puts down to higher manufacturing costs and operating expenses.910

The first half of 2026 was the first improvement. Revenue was $1,511 million, up about 14.0%, and operating profit $290 million against $125 million, a margin of about 19.2%; in the June quarter it was about 21.3%, against 12.5%.1112

TI is also buying in this area. In February 2026 it agreed to acquire Silicon Labs for $231.00 a share in cash, an enterprise value of about $7.5 billion, and has arranged a delayed-draw term loan to fund it.13

The verdict is that this segment is a business TI owns rather than one it dominates. The number to watch is its operating margin, about 21.3% in the latest quarter: a return above 30% would say 2024-25 was the cost of new fabs; a slide back toward 11% would say it was competition.

Moat trajectory: Holding steady

Margin recovered to about 21.3% in Q2 2026 from 12.5%, still far below 2021-22.

The number that tests this moat
Moat Explorer calc
Embedded Processing operating margin, latest quarter
About 21.3% in Q2 2026, from 12.5%

Above 30% would say 2024-25 was the cost of new fabs; back toward 11% would say it was competition.

How it's calculated: 168 / 788 against 85 / 679.
Source: Texas Instruments Form 10-Q, Q2 2026 (Moat Explorer calc) ↗
References
  1. ReportedIt had revenue of $2,697 million in 2025 and operating profit of $304 million, a margin of 11.3%.
    Texas Instruments Form 10-K FY2025 - segment information 2023-2025 (Analog $13,040M/$12,161M/$14,006M, operating profit $5,821M/$4,608M/$5,412M; Embedded Processing $3,368M/$2,533M/$2,697M, $1,008M/$352M/$304M; Other $1,111M/$947M/$979M, $502M/$505M/$307M including restructuring charges/other of -$124M in 2024 and $117M in 2025); segment commentary; product-line descriptions; capital expenditures $5,071M/$4,820M/$4,550M; depreciation $1,175M/$1,508M/$1,918M — FY2023-FY2025 · publ. February 2026 · source ↗
  2. ReportedThree years earlier it earned $1,253 million on $3,261 million, 38.4%.
    Texas Instruments Form 10-K FY2022 - segment information 2020-2022 (Analog $10,886M/$14,050M/$15,359M, operating profit $4,912M/$7,393M/$8,359M; Embedded Processing $2,570M/$3,049M/$3,261M, $743M/$1,174M/$1,253M; Other $1,005M/$1,245M/$1,408M); depreciation $733M/$755M/$925M — FY2020-FY2022 · publ. February 2023 · source ↗
  3. ReportedThe filing notes that customers often invest their own research and development in software that runs on these products, which makes the relationships long, because they prefer to reuse that software from one generation to the next.
    Texas Instruments Form 10-K FY2025 - segment information 2023-2025 (Analog $13,040M/$12,161M/$14,006M, operating profit $5,821M/$4,608M/$5,412M; Embedded Processing $3,368M/$2,533M/$2,697M, $1,008M/$352M/$304M; Other $1,111M/$947M/$979M, $502M/$505M/$307M including restructuring charges/other of -$124M in 2024 and $117M in 2025); segment commentary; product-line descriptions; capital expenditures $5,071M/$4,820M/$4,550M; depreciation $1,175M/$1,508M/$1,918M — FY2023-FY2025 · publ. February 2026 · source ↗
  4. ReportedSales of Embedded Processing products were about 15% of TI's revenue in 2025.
    Texas Instruments Form 10-K FY2025 - segment information 2023-2025 (Analog $13,040M/$12,161M/$14,006M, operating profit $5,821M/$4,608M/$5,412M; Embedded Processing $3,368M/$2,533M/$2,697M, $1,008M/$352M/$304M; Other $1,111M/$947M/$979M, $502M/$505M/$307M including restructuring charges/other of -$124M in 2024 and $117M in 2025); segment commentary; product-line descriptions; capital expenditures $5,071M/$4,820M/$4,550M; depreciation $1,175M/$1,508M/$1,918M — FY2023-FY2025 · publ. February 2026 · source ↗
  5. ReportedRevenue was $3,023 million in 2016, peaked at $3,554 million in 2018, fell to $2,570 million in 2020 and was $2,697 million in 2025.
    Texas Instruments Form 10-K FY2018 - segment information 2016-2018 (Analog $8,536M/$9,900M/$10,801M, operating profit $3,416M/$4,468M/$5,109M; Embedded Processing $3,023M/$3,498M/$3,554M; Other $1,811M/$1,563M/$1,429M, operating profit $622M/$472M/$399M; total revenue $13,370M in 2016); Analog product lines Power, Signal Chain and High Volume — FY2016-FY2018 · publ. February 2019 · source ↗
  6. ReportedRevenue was $3,023 million in 2016, peaked at $3,554 million in 2018, fell to $2,570 million in 2020 and was $2,697 million in 2025.
    Texas Instruments Form 10-K FY2020 - segment information 2018-2020 (Embedded Processing $3,554M/$2,943M/$2,570M; Analog $10,801M/$10,223M/$10,886M; Other $1,429M/$1,217M/$1,005M) — FY2018-FY2020 · publ. February 2021 · source ↗
  7. ReportedRevenue was $3,023 million in 2016, peaked at $3,554 million in 2018, fell to $2,570 million in 2020 and was $2,697 million in 2025.
    Texas Instruments Form 10-K FY2025 - segment information 2023-2025 (Analog $13,040M/$12,161M/$14,006M, operating profit $5,821M/$4,608M/$5,412M; Embedded Processing $3,368M/$2,533M/$2,697M, $1,008M/$352M/$304M; Other $1,111M/$947M/$979M, $502M/$505M/$307M including restructuring charges/other of -$124M in 2024 and $117M in 2025); segment commentary; product-line descriptions; capital expenditures $5,071M/$4,820M/$4,550M; depreciation $1,175M/$1,508M/$1,918M — FY2023-FY2025 · publ. February 2026 · source ↗
  8. ReportedIts best margins came in 2021 and 2022, 38.5% and 38.4%.
    Texas Instruments Form 10-K FY2022 - segment information 2020-2022 (Analog $10,886M/$14,050M/$15,359M, operating profit $4,912M/$7,393M/$8,359M; Embedded Processing $2,570M/$3,049M/$3,261M, $743M/$1,174M/$1,253M; Other $1,005M/$1,245M/$1,408M); depreciation $733M/$755M/$925M — FY2020-FY2022 · publ. February 2023 · source ↗
  9. ReportedRevenue dropped about 24.8% in 2024 and the margin fell from 29.9% to 13.9%; in 2025 revenue rose 6% and operating profit still fell 14%, which the filing puts down to higher manufacturing costs and operating expenses.
    Texas Instruments Form 10-K FY2025 - segment information 2023-2025 (Analog $13,040M/$12,161M/$14,006M, operating profit $5,821M/$4,608M/$5,412M; Embedded Processing $3,368M/$2,533M/$2,697M, $1,008M/$352M/$304M; Other $1,111M/$947M/$979M, $502M/$505M/$307M including restructuring charges/other of -$124M in 2024 and $117M in 2025); segment commentary; product-line descriptions; capital expenditures $5,071M/$4,820M/$4,550M; depreciation $1,175M/$1,508M/$1,918M — FY2023-FY2025 · publ. February 2026 · source ↗
  10. Moat Explorer calcRevenue dropped about 24.8% in 2024 and the margin fell from 29.9% to 13.9%; in 2025 revenue rose 6% and operating profit still fell 14%, which the filing puts down to higher manufacturing costs and operating expenses.
    Moat Explorer calculation from Texas Instruments' Forms 10-K FY2018-FY2025 and the Q2 2026 10-Q: shares of revenue and operating profit, segment operating margins, growth rates and compound growth — FY2016 to Q2 2026 · publ. 2026-09-23 · source ↗
  11. ReportedRevenue was $1,511 million, up about 14.0%, and operating profit $290 million against $125 million, a margin of about 19.2%; in the June quarter it was about 21.3%, against 12.5%.
    Texas Instruments Form 10-Q for the quarter ended 30 June 2026 - segment information for the quarter and six months (Analog $4,365M/$8,289M against $3,452M/$6,662M, operating profit $1,992M/$3,630M against $1,325M/$2,531M; Embedded Processing $788M/$1,511M against $679M/$1,326M, $168M/$290M against $85M/$125M; Other $310M/$488M against $317M/$529M, $150M including $17M of acquisition charges); Silicon Labs agreement of 4 February 2026 at $231.00 a share in cash, enterprise value about $7.5 billion, delayed-draw term loan — Q2 2026 · publ. July 2026 · source ↗
  12. Moat Explorer calcRevenue was $1,511 million, up about 14.0%, and operating profit $290 million against $125 million, a margin of about 19.2%; in the June quarter it was about 21.3%, against 12.5%.
    Moat Explorer calculation from Texas Instruments' Forms 10-K FY2018-FY2025 and the Q2 2026 10-Q: shares of revenue and operating profit, segment operating margins, growth rates and compound growth — FY2016 to Q2 2026 · publ. 2026-09-23 · source ↗
  13. ReportedIn February 2026 it agreed to acquire Silicon Labs for $231.00 a share in cash, an enterprise value of about $7.5 billion, and has arranged a delayed-draw term loan to fund it.
    Texas Instruments Form 10-Q for the quarter ended 30 June 2026 - segment information for the quarter and six months (Analog $4,365M/$8,289M against $3,452M/$6,662M, operating profit $1,992M/$3,630M against $1,325M/$2,531M; Embedded Processing $788M/$1,511M against $679M/$1,326M, $168M/$290M against $85M/$125M; Other $310M/$488M against $317M/$529M, $150M including $17M of acquisition charges); Silicon Labs agreement of 4 February 2026 at $231.00 a share in cash, enterprise value about $7.5 billion, delayed-draw term loan — Q2 2026 · publ. July 2026 · source ↗
Sources
Generated September 23, 2026