Texas Instruments (TXN): JPMorgan sees Texas Instruments positioned for broad-based growth as industrial and auto recover and data-center revenue scales.

Overview

This conference takeaway reviews Texas Instruments' longer-term growth opportunities and current semiconductor conditions across industrial, automotive, data-center and consumer markets. JPMorgan argues that the company is benefiting from a cyclical recovery in its core markets while AI-related data-center demand, pricing actions and expanding 300mm capacity add further growth and margin support.

Core views

JPMorgan reports that demand trends remain relatively strong across TXN's industrial, automotive, data-center and consumer businesses. Following Q2 year-on-year growth in every business, with similar growth trajectories guided for Q3, the institution sees continued strength in the core industrial and automotive operations. In automotive, the year-on-year inflection in the prior quarter was driven mainly by China, the United States and the rest of Asia, along with emphasis on EVs and hybrids and inventories that were viewed as unsustainably low at Tier-1 suppliers and auto OEMs. JPMorgan expects these forces to continue through the second half of 2026. In industrial, the report attributes growth to aerospace and defense, energy infrastructure and automated test equipment, supplemented by continued expansion in multimarket/catalog products. Even excluding aerospace and defense, ATE and energy infrastructure, core industrial sales are still growing by more than 20% year on year, although they remain below prior-cycle peak levels. This distinction supports the report's view that the recovery is broad-based but not yet fully mature. Data center is presented as a major incremental growth engine. JPMorgan says TXN's data-center business is annualizing at roughly $3 billion of revenue and remains on track to potentially double this year. The business spans power-tree products from the grid to the processor, data converters, voltage regulation, and standard/catalog components used in compute and networking motherboards. The institution links this position to TXN's range of GaN, BCD, SiGe and conventional CMOS process technologies, as well as its catalog offerings in timing, data conversion, amplifiers, protection and switching. The report also identifies pricing as a forward growth tailwind. Select analog and mixed-signal price increases are scheduled to take effect at the end of the current quarter, while negotiations are underway for broader increases next year across analog, power and microcontroller lines. JPMorgan believes customers' efforts to secure supply could support these actions as competitor supply conditions become more constrained next year. Finally, JPMorgan views TXN's manufacturing footprint as a strategic advantage in a tightening supply environment. RFAB2, Sherman 1 and Lehi 1 together provide about $25 billion of revenue capacity. With Sherman 2 and Lehi 2 almost fully built out, the company could potentially double its revenue-generating capability. The institution argues that this capacity can support growth, gross-margin expansion and share gains while competitors face supply constraints.

Analysis framework

The report synthesizes management discussion from JPMorgan's U.S. All Stars Conference with end-market demand trends, product positioning, announced pricing actions and manufacturing-capacity expansion. It assesses TXN's outlook by linking cyclical conditions in industrial and automotive markets with data-center demand and the company's ability to supply customers.

Methodology notes

• Industry AnalysisSupply-demand framework

  Semiconductor supply-demand analysis

  The report evaluates demand across industrial, automotive and data-center markets alongside expected supply constraints at competitors and TXN's own available fab capacity.

• Industry AnalysisVolume-price decomposition

  Growth assessed through end-market demand and pricing actions

  JPMorgan separates volume-related demand recovery from expected price increases in analog, power and microcontroller products as sources of future growth.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Texas Instruments (TXN)

  Primary covered company; positioned to benefit from industrial and automotive recovery, data-center growth, pricing actions and manufacturing capacity.

  Strengths

  Broad power and catalog portfolio, multiple process technologies, growing data-center business and substantial available 300mm capacity.

  Weaknesses

  Core industrial growth remains below prior-cycle peak levels.

  Comparison

  JPMorgan expects competitors to face a more supply-constrained environment next year, while TXN retains ample capacity.

  Risks

  The report does not state company-specific risks beyond the conditional nature of its supply, demand and pricing assumptions.

Key data

• Data-center revenue annualization~$3BJPMorgan says the business is annualizing at this level and could potentially double this year.
• Core industrial growth>20% Y/YExcludes aerospace and defense, ATE and energy infrastructure; remains below prior-cycle peak levels.
• Operating revenue capacity~$25BCapacity from RFAB2, Sherman 1 and Lehi 1.
• Potential revenue-capacity expansionPotentially doubleSherman 2 and Lehi 2 are almost fully built out.
• TXN share price$271.41Price as of 22 Sep 2026.

Impact & implications

JPMorgan concludes that TXN's broad end-market recovery, data-center product exposure, planned price increases and 300mm manufacturing investments create a path for growth, gross-margin expansion and potential market-share gains, particularly if competitor supply tightens.

What to watch

• Whether industrial and automotive recovery trends, including low channel inventories and EV/hybrid demand, persist through the second half of 2026.
• Progress toward a potential doubling of data-center revenue from its approximately $3 billion annualized level.
• Implementation of Q4 analog and mixed-signal price increases and negotiations for broader price actions next year.
• Ramp timing and contribution of Sherman 2 and Lehi 2 capacity.