ACE Consulting Report For Texas Instruments

Strategic Analysis of TI
By ACE Consulting:
Monica Amezquita, Belen Castillo,
Dominic Conti, Gretchen Graf,
MC Montgomery, Levi Osburn
22 April 2017
Section 1
Cover Memorandum
To: Mr. Richard Templeton, Chief Executive Officer, Texas Instruments, Incorporated
From: ACE Consulting
Date: March 13, 2017
Re: Texas Instruments Inc. Internal and External Analysis, Strategic Recommendations
Background:
In 2016, the semiconductor and circuit manufacturing industries in the United States generated a
vast $54.2 billion in revenues with exports valued at $28.2 billion1. While profits within this
industry remain high, industry reports claim that semiconductor sales dropped 5.8% in the first
half of the financial year for 20162, and large technology hardware end markets are approaching
maturity and declining phases in the industry life cycle3. While hardware end markets’ margins
are approaching zero, automotive, communications, and health care sectors of the semiconductor
end markets continue to demonstrate a healthy growth following 20164. In 2015, the health care
industry generated $7.4 billion in total inflows from semiconductor sales5, while automotive and
communications industries forecast growth to be particularly strong due to the demand for more
efficient technology.
Critical Issue:
Various issues call for immediate action on behalf of Texas Instruments in order to remain a
leading competitor within the semiconductor industry. With a Herfindahl Index of 1,222 calculated
from current market shares of the leading competitors in the semiconductor space, Texas
Instruments operates in a moderately high competitive marketplace. As of 2016, Texas Instruments
held an 11% market share, with Intel and Qualcomm retaining 27% and 14% respectively, and
Broadcom held an almost 10% of the market share6. In addition to a highly competitive industry
and declining hardware end markets, Texas Instruments’ faces high exit barriers with large
international capital investments in North America, Asia, and Europe7. Given these critical issues,
ACE Consulting provides the following strategies in order to support Texas Instruments’ strong
competitive advantages and increase its overall market share.
Strategic Recommendations:
Although the primary component of a semiconductor chip is a silicone-based product, the current
research proves that silicone may not be the most effective resource to use with these existing
technologies8. Texas Instruments can improve its position within the maturing semiconductor
industry through the acquisition of SkyWorks Solutions. Given TI’s current production of devices
within the medical, healthcare, and fitness sector, ACE Consulting provides information regarding
a product extension strategy, which will provide Texas Instruments with a new core competency
of superior biocompatibility of embedded processors. Furthermore, current research delineates
growing trucking industry revenues and decreasing workforce supply9, Texas Instruments can
develop a self-driving semi-truck for the road freight industry in order to gain market share within
a new market segment. Finally, taking into consideration declining industries, TI can develop a
new business segment by tapping into the growing eco-friendly automotive industry by creating
an efficient battery for these vehicles.
Closing:
Within the following attachment, ACE Consulting fully elaborates upon the aforementioned
strategic recommendations through extensive relevant research. We look forward to reviewing and
discussing these strategic recommendations on April 20, 2017.
Attachment:
1
Source: Semiconductor Circuit Manufacturing in the US, IBISWorld, accessed March 2017.
2
Semiconductors & Semiconductor Equipment Industry Surveys, S&P Global, accessed
March 2017.
3
Ibid.
4
Ibid.
5
Ibid.
6
Ibid.
7
Ibid.
8
Ibid.
9
Ibid.
Signature Page
I have read and approve the following work in this plan:
X
Mo n ica Amezq u ita
X
Belen Castillo
X
Do min ic Co n ti
X
Gretch en Graf
X
MC Mo n tg o mery
X
Levi Osb u rn
Work Distribution
Signature Page
•! Gretchen Graf
Work Distribution
•! Gretchen Graf & Monica Amezquita
Executive Summary
•! MC Montgomery
Table of Contents
•! Gretchen Graf
Overview
•! Belen Castillo
Internal Analysis
•! Monica Amezquita (85%)
•! Dominic Conti (15%)
External Analysis
•! Levi Osburn
Financial Analysis
•! Gretchen Graf (60%)
•! Levi Osburn (30%)
Strategic Alternatives Summary
•! Monica Amezquita
Strategic Recommendations
Bio-Compatible Imbedded Processors
•! Meriwether Montgomery
Self-Automated Road Freight
•! Levi Osburn
Energy Efficient Battery Manufacturing
•! Gretchen Graf
Acquisition Strategy
Conclusions
•! Dominic Conti
Exhibits
Exhibit 1: SWOT
Exhibit 2: VRIO
•! Gretchen Graf
Exhibit 3: HR Staffing
•! Gretchen Graf
Board of Directors
•! Gretchen Graf
Organizational Chart
•! Belen Castillo
Exhibit 4: Value Chain
•! Belen Castillo
Exhibit 5: 4Ps
•! Dominic Conti
Exhibit 6: Core Competence Map
•! Dominic Conti
Exhibit 7: BCG Matrix
•!
Exhibit 9: Competitive Map
•! Dominic Conti (25%)
•! Levi Osburn (75%)
Exhibit 10: Semiconductor Industry 6 Forces
•! Belen Castillo
Exhibit 11: Target Markets
Exhibit 12: TI Accounting Statements
•! Gretchen Graf
Exhibit 13: Skyworks Financial Statements
•! Gretchen Graf
Exhibit 14: Financial Ratios
•! Belen Castillo (50%)
Exhibit 15: Medical Devices 6 Forces
Exhibit 16: Self-Automated Road Freight 6 Forces
•! Levi Osburn
Exhibit 17: Lithium-Ion Battery 6 Forces
•! Gretchen Graf
Exhibit 18: Acquisition
Exhibit 19: Core Competence Strategy
Exhibit 20: CASE Analysis
•! Belen Castillo
Exhibit 21: Competitive Industry Analysis
Work Cited
•! Belen Castillo
Executive Summary
As one of the leading semiconductor manufacturers, Texas Instruments (TI) has an opportunity to
expand its market share through product innovations and creation. TI operates within two market
segments; embedded processors and analog. With 17 % of the market share of the Semiconductor
Industry, TI is the third firm in the industry. Research through the use of Hoovers, MorningStar,
S&P Capital IQ, Emarketer, Euromonitor, Bloomberg, Business Source Premier, LexisNexis
Academic, and the Texas Instruments 10-K (in addition to in depth analysis through exhibits) allow
for well-developed strategic recommendations
The internal analysis within the report, which evaluated the company through SWOT analysis, a
Core Competency map, and a VRIO framework, illustrates the important aspects of Texas
Instrument’s various businesses. The strengths of TI include its strong market position, high
percent of revenue derived from the analog business segment, and flexible manufacturing
capabilities. TI’s large patent portfolio, high-level engineers, and business structure all create
powerful core competencies.
The external analysis highlights the specific industry trends and characteristics that are relevant to
TI. Several Porter’s Forces plus complements detail TI’s external environment. The
Semiconductor Industry as a whole is decelerating in growth as the industry matures. This trend
now requires companies within the market to make R&D innovations or vertically integrate with
other firms.
Thorough analysis and research, several strategies will enhance Texas Instruments as a whole, if
it chooses to integrate them into the firm. By increasing the biocompatibility of embedded
processors, TI has the chance to improve implantable medical devices. Self-driving trucks could
reduce cost for the trucking industry and respond to a declining workforce. New developments in
battery research can lead to cheaper and longer lasting battery life. As the industry consolidates
through increasing merger and acquisition activity, TI can continue to drive sale growth.
i
ii
Table of Contents
Signature Page................................................................................................................................ i!
Work Distribution......................................................................................................................... ii!
Executive Summary ....................................................................................................................... i!
Overview ........................................................................................................................................ 5!
Internal Analysis ........................................................................................................................... 8!
External Analysis ........................................................................................................................ 14!
Financial Analysis ....................................................................................................................... 19!
Endnotes to Analysis ................................................................................................................... 21!
Strategic Alternatives Summary ............................................................................................... 26!
Strategic Recommendations ....................................................................................................... 28!
Bio-Compatible Imbedded Processors ................................................................................................28!
Self-Automated Road Freight ..............................................................................................................29!
Energy Efficient Battery Manufacturing ............................................................................................30!
Acquisition Strategy ..............................................................................................................................31!
Conclusions .................................................................................................................................. 33!
Endnotes to Summaries and Strategies .................................................................................... 34!
Exhibits ........................................................................................................................................ 37!
Exhibit 1: SWOT.................................................................................................................................39!
Exhibit 2: VRIO ..................................................................................................................................43!
Exhibit 3: HR Staffing ........................................................................................................................44!
Board of Directors ...............................................................................................................................46!
Organizational Chart ...........................................................................................................................49!
Exhibit 4: Value Chain ........................................................................................................................51!
Exhibit 5: 4Ps ......................................................................................................................................55!
Exhibit 6: Core Competence Map .......................................................................................................57!
Exhibit 7: BCG Matrix ........................................................................................................................58!
Exhibit 9: Competitive Map ................................................................................................................61!
Exhibit 10: Semiconductor Industry 6 Forces .....................................................................................63!
Exhibit 11: Target Markets .................................................................................................................66!
Product related ......................................................................................................................................66!
Product related ......................................................................................................................................66!
Exhibit 12: TI Accounting Statements ...............................................................................................68!
Exhibit 13: Skyworks Financial Statements .......................................................................................73!
Exhibit 14: Financial Ratios ................................................................................................................84!
Exhibit 15: Medical Devices 6 Forces ................................................................................................87!
Exhibit 16: Self-Automated Road Freight 6 Forces ............................................................................89!
Exhibit 17: Lithium-Ion Battery 6 Forces ...........................................................................................91!
Exhibit 18: Acquisition..........................................................................................................................93!
Exhibit 19: Core Competence Strategy .............................................................................................109!
Exhibit 20: CASE Analysis ...............................................................................................................111!
Exhibit 21: Competitive Industry Analysis .......................................................................................112!
iii
Work Cited ................................................................................................................................ 115!
iv
Overview
Semiconductors changed the world beyond anything that possible imaginable before their
invention. They provide the base for all modern electronics such as our iPhones, smartwatches,
TVs, but they also provide the foundation for the electronic systems that run our cars to the
electronic systems, which land a space shuttle on the moon. Texas Instruments is a company that
has made significant contributions to the semiconductor industry and has consistently invented
products which contribute to our ever – evolving way of communicating with each other and our
devices. Texas Instruments has maintained its success as a competitive semiconductor
manufacturer for over 60 years and it is now one of the world’s top 10 semiconductor companies.10
As electronic devices proliferate, Texas Instruments will continue to be a vital and innovative part
of the semiconductor industry.
Brief History of the Company

Although Texas Instruments is most widely known for their line of graphing calculators, Texas
Instruments (TI) designs and manufactures semiconductors. TI has headquarters in Dallas, Texas
and run by Rich Templeton.11 Texas Instruments originally began in 1930 as Geophysical Service
Inc., which was a small oil and gas company.12 In 1951, four employees bought out Geophysical
Services and created Texas Instruments Inc.13 A few years later, they entered the semiconductor
industry by inventing the silicon transistor.14 In 1954, an engineer named Jack Kilby revolutionized
the semiconductor industry by inventing the integrated circuit, which laid the foundation for all
modern electronics.15 For the next few decades, TI would become an industry leader. Its chips
would be used to the land the Apollo Lunar Exploration Module on the moon and they would
continue to invent products, which expanded the technological abilities of appliance, consumer
electronic and industrial equipment.16 In the past few decades, TI has increased its focus on internal
functions and in 2009; TI opened Kilby Labs, named after Jack Kilby, to fuel innovation at TI and
to provide employees with an environment to explore emerging technologies.17 TI also made a few
key acquisitions, most notably National Semiconductor in 2011, which increases TI’s capabilities
in next generation signal processing technology.18 Today, TI is a Fortune 500 company with more
than 30,000 employees and more than 100,000 products.19
Mission, Vision, and Values of TI, Inc.

Texas Instruments strives to change the way we experience technology, one chip at a time. Its
ultimate vision is to become a premier electronics company providing world leadership in digital
solutions for the networked society. TI has defined three core values: integrity, innovation, and
commitment.20 These core values reflect how TI cares for the quality of their work, the culture of
their team, and their desire to be competitive. The semiconductor industry is consistently evolving,
and new products are always in high demand. TI has been able to fulfill this demand by creating
an environment that fosters the growth of their engineers and gives them the ability to pursue new
projects. TI pursues diversity and inclusion in its teams to create more opportunities for innovation
and to build a stronger team.21 Integrity is an important value for any company to ensure that all
operations are developed and executed with honesty. This maintains the reputation that TI has
worked years to build. When hiring for the company, TI not only looks to these core values, but
also for people who consider themselves builders, doers, dreamers, givers, and most of all, ready
to be part of a team.22
BHAG Goals
5
1.! Expand presence in wireless connectivity segment.
2.! Meet the technological needs of an evolving world.
3.! Improve the quality of life for individuals, one chip at a time.
Smart Goals
1.! Increase market share to 8% in the next 5 years.
a.! Specific: TI currently has 4% market share, but competitors like Intel have 13%.23
TI can aim to double their market share over the span of 5 years.
b.! Measurable: TI is a strong company with a reputation for innovation and strong
competitiveness within the industry.
c.! Attainable: The semiconductor industry is highly fragmented and will see an
increase in global revenues in 2016 from $359 billion in global revenues to $665
billion in revenues by 2021.24
d.! Time – Based: To double the market share in 5 years, an aggressive perusal of
growth strategies would be necessary.
2.! Develop improved embedded processing technology, which can deliver real time data.
a.! Specific: TI can improve upon its existing embedded processing semiconductors to
incorporate the ability for the devices to transmit real time data.
b.! Attainable: TI has a competency in embedded processing and allocates $1.37
billion to R&D, showing they have the money to invest in improving their
products.25
c.! Relevant: One of TI’s main sources of revenue comes from their embedded
processing products.26
d.! Time-Based: TI can conduct research and release its product immediately as an
embedded processor with improved ability to deliver information in real – time.
3.! Diversify into products that are useful in renewable energy.
a.! Specific: Develop an end - product, such as batteries, that are a form of renewable
energy.
b.! Attainable: TI has strong experience in creating technology, which manages battery
efficiency and has the revenue, and R&D to support the research.27
c.! Relevant: Diversify and increase revenue in a familiar industry, while also pursuing
innovative technologies.
d.! Time – Based: To pursue this kind of project, TI would have to spend 2 -3 years
developing the technology to support this type of end – product and but would
immediately be able to sell to car manufacturers.
Texas Instruments is continuing to grow in an industry that is experiencing maturity. Through its
effective supply chain, R&D investment, and innovative culture, TI can continue to be successful
in such a competitive environment. With the goals and visions defined in our BHAG goals, TI can
grow and expand through the creation of new, but related technologies. Texas Instruments would
able to expand its customer base and create presence in new industries. By pursuing SMART goals,
Texas Instruments can gain an edge on its biggest competitors by being one of the first companies
to expand past traditional electronic customers and reach customers in the auto industry, as well
as customers in more diverse industries. Though Texas Instruments operates in a mature,
competitive industry, it still has many competitive opportunities, which will be discussed in the
following analysis.
6
7
Internal Analysis
In 1930, John Clarence and Eugene McDermott founded Geophysical Service, an organization
dedicated to geophysical exploration utilizing the seismograph method28, which served as Texas
Instruments’ catalyst to creation. Twenty years later, Geophysical Service’s founders then bought
out the company and created Texas Instruments, which is dedicated to designing and
manufacturing analog and embedded processors within the semiconductor industry29. Soon
thereafter, Texas Instruments became one of the leading organizations for innovation. In 1954,
Texas Instruments produced the world’s first silicone transistor30, and merely four years later,
produced the world’s first integrated circuit31. Texas Instruments continues its vision of innovation
in order to “improve people’s lives in every region of the world” through “integrity, innovation
and commitment”32.
As of 2016, TI is now among the leading competitors within the semiconductor design and
manufacturing segment. It has design and manufacturing facilities and established sales in over 30
countries worldwide such as China, Japan, and Germany33. This coupled with its large land and
machinery capital investments of over $10 billion34, Texas Instruments currently stands as the third
leading competitor35.
To provide Texas Instruments with relevant and effective strategic recommendations, ACE
Consulting conducted research by acquiring extensive information to draft an internal analysis of
Texas Instruments. Within this internal analysis, ACE Consulting has provided key points from
the following exhibits, which are attached at the end of this document:
1. Situation (SWOT) Analysis
2. Core Competence Map
3. VRIO Analysis
4. HR Staffing
5. Financial Ratios
6. 4 P’s of Marketing
7. BCG Matrix
Product Portfolio
Texas Instruments is one of the leading designers, manufacturers, and sellers of semiconductors
operating within the Analog and Embedded Processor Industry
(Exhibit 1 & 2). Texas Instruments offers products ranging from
data converters and logic to Sitara! and digital signal embedded
processors, totaling over 100,000 products available worldwide.
Texas Instruments holds the industry’s most broad and diverse
portfolio of analog and embedded processing products 36. Its analog
segment alone in 2016 accounted for 64% of total generated
Texas Instruments, Investor Overview,
revenues37 totaling $8.5 billion, while its embedded processing published 2016, accessed April 2017
sectors generated $2.7 billion38. These segments combined account
for over 80% of Texas Instruments’ total revenues39. In the last quarter for financial year 2016,
Texas Instruments’ analog revenue grew 10 % in comparison to revenues generated for the same
quarter in 2015’s Q4; likewise, its embedded processor segments also grew a robust 6% to $3.02
billion40. Texas Instruments continues to generate strong revenues in a maturing industry due to
8
its large innovative product portfolio through extensive R&D capabilities. In 2016 alone, Texas
Instruments allocated $1.37 billion to R&D activities41. Through these efforts, Texas Instruments
captured 17% of the fragmented market share existing within the embedded processor segment.
For further information regarding Texas Instrument’s Product Portfolio, please refer to the
Marketing segment of the internal analysis section or to the 4 P’s of Marketing exhibit.
Physical Resources
In order to ensure Texas Instruments’ maintains its competitive advantage as the industry’s
provider of the broadest and most diverse product portfolio42, its manufacturing capabilities must
correlate to production demands. Because Texas Instruments serves about 100,000 customers
worldwide43, TI has manufacturing capabilities in over 30
countries, placing the largest emphasis on locations with high
potential revenues such as China and Japan as well as all
locations in North Asia, with other manufacturing property and
capital throughout the Americas and Europe44. In 2016, Texas
Instruments reported nearly $10 billion in assets worldwide in
land, buildings & improvements, machinery & equipment, and
property, plant & equipment45. Texas Instruments continuously
ensures to expand. In 2009, Texas Instruments opened the
industry’s first fabrication plant for 300-millimeter wafers and Texas Instruments, 300mm for Analog
Technologies, accessed April 2017
Analog manufacturing (which reduce fabrication costs by
roughly 40%)46 , named RFAB in Richardson Texas47.
Texas Instruments expansive portfolio of physical resources strengthens its competitive advantage
in flexible manufacturing capabilities. Due to the industry’s extreme volatility because of
seasonality, Texas Instruments ensures manufacturing flexibility. Texas Instruments currently
manufactures 80% of their semiconductors within 15 different manufacturing sites in 9 different
countries worldwide, and has strong partnerships with foundry and subcontractors48. Therefore,
when seasonal business cycles demand hit a trough, Texas Instruments predominantly relies on its
in-house manufacturing for their products; conversely, when demands hit a peak, Texas
Instruments seeks manufacturing capabilities from its partnered organizations. Furthermore, its
global headquarters and manufacturing presence enhances Texas Instruments’ ability to study
regional demands and implement appropriate strategies.
Financial Ratios
While Texas Instruments demonstrates a healthy business performance and appears to grow at a
healthy rate despite cyclical trends within its operating businesses49, its market share in comparison
to its competitors remains much lower. Isolating the market shares of the top three competing
organizations, Texas Instruments only retains a 22% market share of the total made up by Texas
Instruments, Intel, and Qualcomm. Therefore, Texas Instruments possesses room for growth in
order to achieve a stronger market share competency. In addition to a lack of compared scale,
Texas Instruments recently reported an increase in doubtful accounts receivable ratios as seen on
their most recent 10-K50. Taken as a measure of their accounts receivable allowances over accounts
receivables gross, Texas Instruments ratios increased from 0.60% in 2015 to 1.30% in 201651,
rendering Texas Instruments a slightly riskier organization. Furthermore, Texas Instruments
recently faced an excess amount of inventory in distribution channels52, though easily explained
9
by the industry’s strongly cyclical nature, particularly that of the communications sector. As an
effect, Texas Instruments’ cash reserves have decreased. In 2013, Texas Instruments reported a
cash and cash equivalents quantity of $1,627 million, but declared a quantity of $1,154 million,
i.e. a decrease of 29%53. While inventories were high and cash reserves were low, Texas
Instruments also possesses a possible weakness in regards to their customer portfolio diversity.
Currently, Texas Instruments generates a large proportion of sales by selling Nokia, which
generated roughly 21% of revenues in 201654. Given Nokia’s recent troubles, Texas Instruments’
heavy reliance on a particular customer renders room for a possible weakness.
Capital Management Strategy

Texas Instruments strives to “grow, generate, and return cash to shareholders for a long time to
come”55, therefore placing a large emphasis on capital management as “good execution and
disciplined capital allocation [as] the most important responsibilities for business leaders”56.
Therefore, Texas Instruments allocated $39 billion of capital in
the following segments in its most recent allocation strategy57:
1.! Research and Development, Capital Expenditures,
Sales & Marketing, Investments
2.! Share Repurchases
3.! Acquisition
4.! Dividends
With this particular allocation, Texas Instruments seeks to
achieve the following respectively:
1.! Organic Growth of Business
2.! Accretive Capture of Future Free Cash Flows for Texas Instruments, “Capital Management
Strategy”, published 2016, accessed April 2017
Long Term Investors
3.! Inorganic Growth
4.! Appeal to Broader Set of Investors
Texas Instruments reports that this particular allocation of funds allows it to expand as an
organization, with an emphasis on its strengthened portfolio58. Texas Instrument’s constant
investments in research & development activities allow for continued product innovation. In 2016,
Texas Instruments allocated $1.3 billion of its $13.37 billion net revenues to Research &
Development59, particularly in its industrial, automotive, personal electronics, and communication
and enterprise systems60. By placing 15.1% of the aforementioned $39 billion in R&D, CapEx,
and Sales and Marketing, Texas Instruments ensures to develop new products and technologies,
allow for portfolio readjustments and re-alignment, and enhance its execution of products to allow
for a greater monetary output per product input61.
Through its capital management strategy, Texas Instruments ensures to generate strong, steady,
and elevated free cash flows continuously, which in turn allow for share repurchases and dividend
payments as well as acquisition activities. Texas Instruments seeks to “repatriate cash at lowest
possible tax rates so it can be invested in business or returned to shareholders”62. Over the last 13
years, Texas Instruments managed to increment dividends at a CAGR rate of 23%; in 2016, Texas
Instruments returned $3.8 billion to owners through stock repurchases and dividends63. In 2016,
Texas Instruments reported $1.15 billion in cash and cash equivalents. Its high liquidity strategy
encapsulates its debt strategy by allowing higher levels of debt, in 2016 $5.95 billion64, without
lowering credit credibility.
10
Organizational Culture and Corporate Citizenship
Texas Instruments’ values of integrity, innovation, and commitment provide the founding elements
for its strong organizational culture. Texas Instruments’ executive officers and employees ensure
that they continuously embed these values into their day to day lives while at TI, claiming that this
“common character and set of ethics are instilled in [its] company’s DNA”65, with integrity at
Texas Instruments’ core. TI members believe in “doing the right thing”, as it “matters more to us
than profits, and we expect it of all our people regardless of position or geography”66. Executive
Officers expect employees to act honestly, ethically, treat each other fairly, and respectfully,
protect health and safety of people and environment as well as to minimize waste67. Throughout
the years, these values have become an integral part of Texas Instruments’ established citizenship
strategy, which TI claims to be an integral part of its core competencies.
Within this strategy, Texas Instruments’ officers ensure operations follow the following, concrete
guidelines68:
1.! Business Practices
2.! Product Stewardship
3.! Environmental Responsibility
4.! Supply Chain Diligence
5.! Employee Well Being
6.! Community Improvement
Through these efforts, Texas Instruments commits to remain accountable for its social,
environmental, and economic impact around the world69. In 2015 alone, Texas Instruments
invested more than $250 million worldwide in education, emphasizing communities with
unrepresented students in science, technology, engineering, and math (STEM) sectors70.
Furthermore, despite recent organizational growth and investment in property and plant equipment
to support its transition from 200 mm wafer technologies to 300 mm as well as increasing inventory
production, Texas Instruments managed to conserve 7.7 billion gallons of water globally.
Because of these internal and external efforts, Texas Instruments is widely renowned and
constantly praised as a responsible organization. Commencing with its Glassdoor Ratings, Texas
Instruments’ Chief Executive Officer, Rich Templeton (Exhibit 3), has a 92% approval rating as
CEO71, and through continuous efforts to offer a friendly
work environment while offering a variety of professional
development and training opportunities, Texas
Instruments holds a 3.9 star rating72. 83% of employees
would recommend working at Texas Instruments to a
friend, with work life balance ranging from 3 to 5 stars
(Exhibit 4). From 2013 through 2017, Texas Instruments
received over 75 awards in areas such as business, good Glassdoor, Texas Instruments Rating
Trends, accessed April 2016
employer and diversity, corporate citizenship and ethics,
73
and environmental safety and health , with CareerBliss awarding Texas Instruments as one of the
“50 Happiest Companies in America” for the sixth year in a row74.
Marketing
11
A breakdown of the 4 Ps of Marketing can be found in exhibit 5. Texas Instruments segments its
products into the categories of amplifiers, audio, clock and timing, data converters, die and wafer
services, digital light processor (DLP) products, interface, isolation, logic, motor drivers, power
management, embedded processors, microwave, sensing, storage, switches, multiplexers, and
wireless connectivity.75 TI sells over 100,000 products and has a large patent portfolio which gives
the company flexible manufacturing capabilities.
Although TI has numerous business segments (Exhibit 6), it categorizes them into the following
groups:
1.! Analog processors
2.! Embedded processor
3.! Other
Analog processors include High Volume and Logic (HVAL), Power Management (Power), High
Performance Analog (HPA) and Silicon Valley Analog (SVA).76 Embedded Processing
incorporates all the other semiconductors, but primarily Microcontrollers and Connectivity
products.77 The other category includes DLP products, calculators, customer ASICs and royalties.
In the past year, Analog revenue grew 3 percent and Embedded Processing grew 2 percent.78
Analog and Embedded Processing represented 86 percent of total revenue in 2015, which is 3
percent higher than the year before.79 However, the “other” category experienced a decline in
revenues in calculators and ASIC products, but growth in DLP products creating a net profit of
$12 million.80
In addition to its products, Texas Instruments has a unique strategy for placement, pricing, and
promotion. TI has manufacturing facilities in nine countries and sales locations in more than 21
countries (Exhibit 1). 85 % of TI’s revenue comes from shipments to locations outside the United
States; in particular, shipments of products into China.81 TI markets its wide selection of products
through the internet, direct sales, and distributors. 60% of revenue was generated from sales
through distribution channels.82 However, distributors have the power to promote competing
products, which entices TI to keep good relationships with its distributors. TI rarely advertises
through traditional mediums such as commercials or online ads, but rather advertises its products
to various distributors in the supply chain. Additionally, the company expenses advertising and
other promotional costs as incurred.83 TI spent $44 million on promotion in 2016 and $46 million
in 2015.84
Lastly, TI’s semiconductors range in price from $.04 to $200 per unit.85 The price changes
depending on the semiconductor’s capabilities, and as the quantity increases, the price decreases.
TI’s profit margins vary over time as the customer demand, shipment volume, and obsolescence
of inventory change.86 Semiconductor prices and manufacturing costs tend to decline over time
as the product life cycle matures. Since the semiconductor industry is extremely competitive, TI
will experience reduced profit margins and lost business if it is unable to match the price or cost
efficiencies of competitors.87 Lastly, TI reserves the right to change the price of an order if the
industry condition dramatically changes during the order placement and delivery.88
Conclusion
Despite highly cyclical trends which affect the organization’s demand and outputs, Texas
Instruments is well equipped to sustain itself within the maturing industry. However, with further
12
opportunities as well as various threats arising in the changing industry as described within the
External Analysis segment, Texas Instruments can utilize its robust line of core competencies
(Exhibit 6) to expand and gain market share, and effectively reduce competitors’ stance in the
industry.
13
External Analysis
Introduction:
As a manufacturer of semiconductors, Texas Instruments operates in a fascinating industry
changing with future of technology. As numerous segments of the industry are forecasted to enter
a stage of maturity, consolidation and acquisition attempts from the strong incumbents are likely
in order to maintain growth. Emphasis will also be on limiting fixed costs, like manufacturing and
purchases. Looking at the SWOT, Porter’s Five Forces, and multiple global semiconductor
Industry reports, ACE Consulting conducted extensive analysis on the semiconductor industry in
order to represent a comprehensive summary of the major trends of the industry.
Industry Breakdown:
Texas Instruments operates as the third largest player in semiconductor industry (exhibit 7)89,
which collected $359 billion in revenues in 201690. The company provides the most diversified
portfolio of semiconductors in the Analog and Embedded Processor Industries, where TI
dominates the competition91. Based on segment revenue estimations and company reported
revenues, TI collects 18% of the Analog market revenues92, and 17% of Embedded Processors93.
Semiconductor competition is intense, and will only stiffen if growth matures as expected94.
Certain segments will see pockets of high growth,
like the advancement of driver assistance in the
automotive industry, and automation in industrial
warehouses95. To capture continued growth, large
incumbents are expected to consolidate96. Many
companies have already taken steps to acquire well-
positioned smaller players97 with competencies
outside of their own. Semiconductor manufacturing
depends heavily on end-product demand98, like PC’s
and smartphones, two main consumer electronic
goods that have driven semiconductor demand in the
past, but are now seeing slower growth rates. Internet of Things trends will need new
semiconductor components99, as will other technology innovation. R&D commitment, a staple of
the industry, is imperative to stay relevant with these changes. The semiconductor industry is
global, with Asia being central for manufacturing because of its lower costs100. TI has developed
manufacturing and R&D in Asia to keep pace with industry advancements, and generates 85% of
its revenues outside the US101.
Industry Landscape:
By comparing an over 55% revenue growth rate in 2010 to 1-3% growth in 2016 and 2017102, the
industry appears to have reached a stage of maturity. Despite expected consolidation and
slowdown in major segments, outlook for the semiconductor industry remains positive, and
expects to reach $665.4 billion in 2021103. Geographically, Asia-Pacific will be the main driver of
growth because of its access to low cost manufacturing labor104, concentration of consumer
electronics and semiconductor fabrication production sites105, and a population supplying a high
demand for both electronics goods, and therefore semiconductors (40%)106.
14
The main end-market segments of semiconductor devices107: (market share % of industry)
1.! Computing (31%)

2.! Wireless Comm (30.4%)
3.! Consumer (13.9%)
4.! Industrial (9.6%)
5.! Automotive (8.8%)
6.! Wired Comm (5.5%)
Competition:
Using the top 10 players, the industry
scores 2,340 a Herfindahl index108
(Exhibit 8), placing it near an oligopoly.
However, this is misleading because competition remains high. End-market segments do not
always overlap. Companies with high portions of market share do not operate in every end-market
segment. TI has 28% of overall analog device sales109, but is a small player in consumer electronics
compared to Intel and Samsung. Below, the top 5 players are identified and discussed in brief:
Intel: The revenue share leader in the industry, Intel is a US-based company holding 15% of global
revenue110. Among end-market segments, Intel holds 41% market share of computing111 and 12%
of wired communication end segments in 2015112 (Exhibit 9).
Samsung: The South Korean company

that has backwards integrated to make
chips for their consumer electronic
goods. Samsung captures 11% of global
revenues with a focus on computing
(11.9%), wireless (19.2%), & consumer
(8.6%)113
QUALCOMM: Received 14% of

revenue in 2016114, and made a recent
acquisition of NXP Semiconductors, a
medium sized, young chip maker with
skills in segments where QUALCOMM did not115
Broadcom: TI’s largest peer in the analog market, and received 10% of overall 2016 chip
revenues116. Broadcom’s largest revenue stream came from the wireless communications end
segment117.
Industry Opportunities and Threats:

As an irreplaceable component in everyday technology and consumer electronics of modern
society118, the semiconductor industry will see demand for new products every year. However,
being tied to the technology market means being subject to its starts and stops. Saturation of the
15
PC and smartphones segments119 means strong growth will be harder to maintain. Major players
wishing to achieve additional growth will have to be creative and find new segments based on
trends like machine learning, automation, and internet of things120.
In the automotive industry, growth is driven by increased adoption and integration of electronics
into vehicles121, as well as advancements in battery efficiency. TI operates heavily in this
industry122, and reports receiving 18% of its revenues from the automotive segment123. Another
opportunity is growth in the Internet of Things industry. Partly driven by the global increases of
internet usage124 and consumers demand for more devices to be interconnected125. For this to be a
reality, semiconductors will be needed in new devices.
One notable threat to this industry (Exhibit 10) is from electronics manufacturers backwards
integrating to manufacture their own semiconductors. This is evident with Apple, building its own
semiconductors for the iPhone, and controls a 2.9% market share of the consumer segment in
2015126. Less access to consumer electronics is problematic for manufacturers long term.
Industry Forces
Rising Manufacturing Costs: Economies of scale are needed to compete with the large industry
incumbents127. The larger the scale of manufacturing, the smaller the unit price, and the better
bargaining power a company has with purchasers128. In 2001, the cost of a high-end fabrication
facility was only $1 billion129. Current capital requirements for a cutting edge production site are
estimated at $10 billion130. Costs related to fabrication development are reported to be rising at a
13% rate annually131. Access to highly skilled workforce is also a cost driver in the industry132 to
enable production of more complex, sought-after chips. To mitigate these growing costs, some
companies allocate more capital to design, and outsource fabrication of chips to foundry
companies in Asia133 that focus on large-scale production. TI reported that 20% of its chips are
expected be produced by foundries in 2016134. Part of this approach is rooted in the hope of
maintaining Moore’s Law, (named after Intel’s founders) who said that chips should double in
capacity every two years135. Design firms can spend higher amounts of R&D on design, rather than
scaling larger manufacturing operations.
Growing Consolidation: In order to maintain growth, many larger companies choose to increase
the portfolio of semiconductors offered by merging or acquiring complementary manufacturers.
Funds saved from outsourcing manufacturing is expected to be funneled into capital spending on
company acquisition136
A List of recent M&A:

•! Intel make $15 billion bid for Mobileye137 (2017)
•! QUALCOMM purchases NXP138 (2016)
•! Broadcom and Avago Merge139(2015)
•! Analog Devices and Linear Technology Corp. agree to merge140 (2016)
Raw Materials: Purchases account for 44% of industry revenues to secure necessary materials for
high quality production141. If purity of materials is not secured, quality of chips produced will
16
suffer142. TI also has a focus on sourcing of conflict-free precious metals143, making sourcing that
much more difficult.
Target Markets:
Four main target markets were the focus of our analysis: Aging Population of the United States,
Freight Manufacturers and Dependents, Car Manufacturers, and Global Consumer Electronic
Manufacturers (Exhibit 11). Because Texas Instruments conducts the majority of its operations
selling to businesses, three of our target markets reflect these typical business-to-business
operations. The aging population in the US forecasts a 73.5% growth rate by 2030144. As this
demographic age their dependence on healthcare will also increase, the National Health
Expenditure is expected to grow annually at a rate of 5.6% from 2016 to 2025145. The consumer
demand amongst the aging population centers on a desire for accurate diagnosis and competence
in healthcare146. Awareness of this key market is necessary for businesses involved in the medical
industry.
Analysis on the Freight Manufacturers market is crucial to understand for any firms wanting to
enter the Road and Rail industry. Within the United States, the Freight Trucking Industry has
experienced negative growth at a rate of -2.1% in 2016147. However, this market is predicted to
grow at a rate of 1.0% from 2017 to 2022148. A contributing factor that deters market growth is
the aging workforce of drivers that is leading to a driver shortage in the market149. Additionally,
the volatility of crude oil prices effects the cost of freight operations150. The Freight Manufacturing
market will retain little growth if business practices remain the same; therefore, innovation is key
for these manufacturers to increase industry revenue.
Car manufacturers is another target market that is analyzed as these organizations directly control
the installation of car products and features. Car manufacturers in the United States can expect a
decrease in sales by 1.5-2% in 2017151. These sales expect to plateau in 2018152. In order to drive
growth, competing with Asia-Pacific manufacturers is key for US car manufacturers153.
Consumers are looking for cheaper and more high-tech automobile options154. As unemployment
rates and lower gasoline costs will help sales volume increase155, car manufacturers must seek new
ways to innovate in order to take advantage of increasing consumer disposable income156.
With an increasing of young consumers to purchase products, as they tend to form new households
and have a greater demand for technology157, manufacturers of consumer electronics will seek to
appeal to these consumers seeking smart features158. The ability of a firm to manufacture goods
at an affordable rate for consumers will improve the manufacturers’ competitive edge amongst
rivals. The top three locations of electronic manufacturers are North Asia, Europe, and North
America; the North Asian region operates 58.9% of consumer electronics manufacturers159.
Location of manufacturing is dependent upon cost of operations within the country, proximity of
complimentary industries, and government regulations that may affect production160.
Conclusion and Takeaways:
Texas Instruments position in the fast-paced technology industry means many opportunities exist
during an exciting period. While overall growth is forecasted to stabilize, TI stands to gain
17
business in certain areas like the automotive segment, an established strength of the company;
more electronics are being built in to the vehicles. Much of the demand for increasing
connectivity in cars will be expand to other markets, as the Internet of Things trend creates
demand.
Numerous forces need to be maneuvered in a large and competitive industry. A mature stage for
the industry cycle has spurred high number of mergers and acquisitions. TI's leadership is
conservative in this arena, as the costs of failed attempts are high. However, now is an ideal time
to acquire a smaller manufacturer with complementary competencies, or market share in a style
of semiconductor outside of TI's portfolio.
Not every movement of the overall industry can be predicted but ACE Consulting believes that
TI's strength in leadership, and efficient business practices bring the company agility to
maneuver whatever comes next.
18
Financial Analysis
Introduction
As aforementioned in the External Analysis, segment of this report, the global semiconductor
industry’s maturity results in declining prices and manufacturing costs. Despite consolidation
efforts, the analog and embedded processor markets remain extremely fragmented. TI faces
significant global competition, but high competitive performance depends on producing
differentiated, reliable, and superior products, which in turn establish a healthy financial standing.
In order to establish and maintain this “healthy financial standing” in an industry which has
otherwise matured, organizations look to increasing market share in its existing industries or to
gain competitive advantages in new market segments through increasing mergers and acquisition
efforts. Texas Instruments operates within the semiconductor industry where one component
driving revenue is the increasing utilization of wireless connectivity devices. For this reason, ACE
Consulting recommends Texas Instruments to acquire one of the leading organizations operating
within the wireless connectivity sub-industry, Skyworks Solutions.
Within this Financial Analysis, ACE Consulting provides key ratios highlighting both Texas
Instruments’ and Skyworks Solutions’ following financial information:
1.! Revenue
2.! Profitability
3.! Liquidity
4.! Debt Management
5.! Asset Management
6.! Financial Capital
Revenues
In 2016, TI grew revenues by 2.8%, adding $370 million to the $13 billion total in 2015 (Exhibit
12)161. The analog segment generated 64% of revenues for the year, a product segment with 36.6%
operating profit from revenues, where TI is the industry leader, accounting for 18% of global
sales162. TI is as an efficient leader in the industry, shown by its leading inventory turnover margin
among top peers163. Decreased manufacturing costs164 paired with previously stated revenue
increases also exhibit the company’s efficiency, despite its size. Dividends per share increased to
$1.64 in 2016, up 17% from $1.40 in 2015. Excess cash allowed TI to compensate shareholders,
a sign of strong revenue performance.
Geographically, 60% of TI’s revenues originate in Asia165, due mostly to the region’s dominance
in electronics manufacturing. However, no single customer accounted for more than 10% of TI’s
revenues for the year166. This diversity in customer base forecasts healthy revenues for the future.
Similar to Texas Instruments, Skyworks Solutions also celebrated positive revenues for 2016
(Exhibit 13), with net revenues at $3.28 billion. Although Skyworks’ year increase from 2015 net
revenues of $3.258 billion do not appear significant, Skyworks’ revenues have grown at a rate of
109% over a five year period from $1.56 billion in 2012. The strengthening utilization of wireless
connectivity technology such as wearable sport items and automotive parts explain Skyworks’
large spike in revenues.
19
Profitability
Despite the cyclical nature of the semiconductor market, characterized by periods of high demand
with low supply or low demand with high supply, TI and Skyworks Solutions both experienced
increased annual gross profits. Texas Instruments’ value increased by 9%167, while Skyworks
experience increased gross profits from $1.55 billion in 2015 to $1.66 billion in 2016. Texas
Instruments’ return on assets also increased from 17.59% to 22% in 2016; a strong sign of financial
health due to the industries capital-intensive nature and average of 10.56 %168.
TI’s net profit margin of 26.89% indicates a high margin of financial safety, especially in
comparison to the industry average of 18.28 %169. While Texas Instruments’ Free Cash Flow is
over 30%170, eclipsing its net profit margin. TI is able to keep its costs down by maintaining low
fixed costs because it owns the majority of its manufacturing capacity171. This ultimately
demonstrates that TI has a financial foundation that can support growth and expansion.
Liquidity
In order to fund operations, make investments, strategic acquisitions, and to meet their debt
obligations, Texas Instruments maintains a high level of liquidity with a quick ratio of 2.5 (Exhibit
14). Its current ratio of 3.29 indicates its ease in paying back its obligations because its assets have
a greater value than its liabilities. TI’s primary source of liquidity is cash flow from operations
along with cash and cash equivalents. Cash flow from operating activities was $4.61 billion in
2016, an increase of $217 million from 2015 due to increases in net income. Its cash and
equivalents also increased to $3.49 billion.
Texas Instruments demonstrates its ability to pay back short-term debt with a quick ratio of 2.5,
and Skyworks Solutions ensures its ability to maintain high credit ratings with a quick ratio of 7.1.
In 2016, Skyworks’ quick assets totaled $1.5 billion while its current liabilities totaled $2.1
million. Therefore, for every dollar spent on a current liability, Skyworks Solutions currently has
7.1 times the needed capital to ensure financial stability.
Debt Management
Despite a small increase in accounts receivable to $1.27 billion in 2016, TI’s strong cash flows
allowed it to leave its revolving credit facility completely undrawn and its debt-to-equity ratio to
decrease from 4.15% to 3.46% (Exhibit 14). This is preferable as utilizing the revolving credit
facility would charge additional interest that shareholder funding does not. Furthermore, in 2016,
Texas Instruments more than doubled its investment activities in 2016 to $650 million172.
Financing activities totaled $3.8 billion in 2016 and it repaid $1 billion in maturing debt173. It
received $499 million through issuing fixed-rate, long-term debt and paid $1.65 billion in
dividends, up from the $1.44 billion paid out in 2015 due to increases in the dividend rate and
fewer shares outstanding. EPS therefore increased from $2.86 in 2015 to $3.54 in 2016174.
Asset Management
TI’s commitment to in-house production175, and ownership of fabrication plants and equipment
around the world176 is against industry trend177, but it gives TI long term asset value. Another effect
of this is responsibility to secure raw material purchases ahead of time for manufacturing178, which
are subject to fluctuation. ROA and current ratio, among other asset ratios appear to be positively
affected by this strategy, seeing increases in the past year (Exhibit 14).
20
Endnotes to Analysis
10
Justin Walton. “The World’s Top 10 Semiconductor Companies,” Investopedia, April 22,
2016, http://www.investopedia.com/articles/markets/012216/worlds-top-10-semiconductor-
companies-tsmintc.asp, accessed April 2017.
11
“About TI”, Texas Instruments,
http://www.ti.com/corp/docs/company/awardfactsheet.shtml?DCMP=Citizenship&HQS=awards
, accessed April 2017.
12
Ibid.
13
Ibid.
14
Ibid.
15
Ibid.
16
Ibid.
17
Ibid.
18
Ibid.
19
Ibid.
20
“Our Values”, Texas Instruments,
http://www.ti.com/corp/docs/company/awardfactsheet.shtml?DCMP=Citizenship&HQS=award,
accessed April 2017.
21
Ibid.
22
Ibid.
23
Source: Semiconductor and Circuit Manufacturing in the US, IBISWorld, accessed March
2017.
24
Source: Global Semiconductor and Electronic Parts, IBISWorld, accessed April 2017.
25
Texas Instruments, Inc., February 23, 2017 Form 10 –K, accessed April 2017.
26
Ibid. p. 7.
27
Ibid. p. 5.
28
Texas Instruments Incorporated Company Profile, Business Source Premier, published
November 01, 2016, accessed April 2017
29
“History of Innovation”, Texas Instruments, accessed April 2017,
http://www.ti.com/corp/docs/company/history.html
30
Ibid.
31
Ibid.
32
“Who We Are”, Texas Instruments, accessed April 2017,
http://www.ti.com/corp/docs/company/home.html
33
“About TI - Locations”, Texas Instruments, accessed April 2017,
http://careers.ti.com/locations/
34
Source: Texas Instruments Company Financials, Mergent Online, published December 2016,
accessed April 2017
35
S&P
36
“Texas Instruments Fact Sheet”, Texas Instruments, published 2015, accessed April 2017,
http://www.ti.com/corp/docs/company/factsheet.shtml
37
Op. Cit., Texas Instruments Company Financials
38
Ibid.
39
“Products”, Texas Instruments, accessed April 2017,
http://www.ti.com/corp/docs/company/technology_innovation.html
21
40
“Texas Instruments – Investor Overview”, Texas Instruments, accessed April 2017,
http://www.ti.com/corp/docs/investor_relations/downloads/investor_overview.pdf
41
42
Op. Cit., Texas Instruments Fact Sheet
43
Ibid.
44
Op. Cit., About TI - Locations
45
46
“Investor Overview”, Texas Instruments, published 2016, accessed April 2017.
47
“300 mm for Analog Technologies”, Texas Instruments, published electronically October
2012, accessed April 2017
48
“About TI: Manufacturing”, Texas Instruments, accessed April 2017,
http://www.ti.com/corp/docs/company/manufacturing.html#flexibility
49
Texas Instruments Inc. Stock Report, S&P Capital IQ, accessed March 2017.
50
Ibid.
51
Ibid.
52
Op. Cit., “Texas Instruments Inc. Stock Report”
53
Ibid.
54
Texas Instruments Incorporated Company Profile, DataMonitor, accessed March 2017.
55
“Capital Management Strategy”, Texas Instruments, published 2016, accessed April 2017,
http://files.shareholder.com/downloads/TXN/4066151513x0x806702/23c992a4-efa4-45d7-add7-
71e5bf38910d/TI_Capital_Management_Strategy_Comprehensive_Summary.pdf
56
Ibid.
57
Ibid.
58
Ibid.
59
Texas Instruments Financials, Mergent Online, published December 2016, accessed April
2017
60
Op. Cit., Capital Management Strategy, pg. 9
61
Ibid.
62
Ibid.
63
“Texas Instruments Q416 Financial Statements”, Texas Instruments, accessed April 2017,
http://files.shareholder.com/downloads/TXN/2958970821x0x925049/D33259D3-39B8-40D4-
AC32-6ADA152166A2/TXN_News_2017_1_24_General.pdf
64
Op. Cit., Texas Instruments Financials
65
“Code of Conduct: Our Values and Ethics”, Texas Instruments, accessed 2017,
http://www.ti.com/corp/docs/investor_relations/downloads/TI_Code_of_Conduct_our_values_an
d_ethics.pdf
66
Ibid.
67
Op. Cit., Code of Conduct, pgs. 12-21
68
“Our Approach: Citizenship Strategy”, Texas Instruments, accessed April 2017,
http://www.ti.com/corp/docs/csr/strategy.html
69
“Citizenship Principles”, Texas Instruments, accessed April 2017,
http://www.ti.com/corp/docs/csr/2013/downloads/Citizenship_Principles_FINAL_Oct2015forCit
izenshipwebsiteupdate.pdf
70
“2015 Corporate Citizenship Report”, Texas Instruments, published 2015, accessed April
2017, http://www.ti.com/corp/docs/csr/downloads/CCR-2015Report-PRINT.pdf
71
Texas Instruments Overview, Glassdoor, accessed April 2017
22
72
Ibid.
73
“TI Awards Facts Sheet”, Texas Instruments, published 2017, accessed April 2017,
http://www.ti.com/corp/docs/company/17130_CCR_Awards_FactSheet_2017_1Q_RD4.pdf
74
Ibid.
75
Texas Instruments, http://www.ti.com, accessed April 2017.
76
Texas Instruments Inc., December 31, 2016 Form 10-K, p. 19.
77
Ibid.
78
Ibid.
79
Ibid.
80
Ibid.
81
Op. Cit. “Texas Instruments Inc., December 31, 2016 Form 10-K” pg 10.
82
83
84
Ibid.
85
Op. Cit., “Texas Instruments”
86
87
88
3
Source: Texas Instruments Inc. Stock Report, S&P Capital IQ, accessed March 2017.
90
Source: Texas Instruments Incorporated Company Profile, DataMonitor, accessed March
2017.
91
Source: Texas Instruments 2016 10-K, accessed March 2017
92
Ibid
93
Ibid
94
Source: Semiconductors and Semiconductor Equipment, S&P Capital IQ, accessed March
2017
95
Op. Cit., Global Semiconductor Outlook
96
Ibid
97
Ted Greenwald. “Intel Joins Silicon Valley’s Race to make ‘Best Server on Wheels’ with
Mobileye Deal”, WSJ, March 13, 2017, accessed March 2017
98
Op. Cit., Semiconductor and Semiconductor Equipment
99
Source: Global Semiconductor Report, IBISWorld, accessed March 2017
100
Op. Cit, Semiconductor and Semiconductor Equipment
101
Op. Cit., 10-K
102
Op. Cit., Semiconductors and Semiconductor Equipment
103
Op. Cit., Global Semiconductor Report
104
105
106
Ibid
107
Ibid
108
Op. Cit., Semiconductors and Semiconductor equipment
109
110
111
Ibid
112
Ibid
113
Ibid
23
114
115
116
117
118
Source: Global Semiconductors, Marketline, accessed March 2017
119
Source: Global Semiconductor Outlook, Bloomberg LP, accessed March 2017
120
Ibid
121
122
123
Op. Cit., 10-K
124
Op. Cit.,Global Semiconductor Report
125
126
127
Op. Cit., Global Semiconductor Industry Profile
128
129
130
Ibid
131
Ibid
132
133
Op. Cit., Global Semiconductors
134
Op. Cit., 10-K
135
Op. Cit., Marketline Global Semiconductors
136
Op. Cit., Bloomberg Global Semiconductor Outlook
137
Op. Cit., Ted Greenwald
138
Op. Cit., Bloomberg Global Semiconductor Outlook
139
Brent Nyitray, “Basics of the Broadcom-Avago Merger”, Yahoo Finance, June 3, 2015,
accessed March 2017
140
141
Op. Cit., IBISWorld Global Semiconductor Report
142
Op. Cit., Marketline Global Semiconductors
143
Op. Cit., 10-K
144
Source: The United States of America in 2030: The Future Demographic, via Euromonitor
International, accessed March 2017.
145
Center for Medicare & Medicaid Services, “NHE Fact Sheet,” http://www.cms.gov/research-
statistics-data-and-systems/statistics-trends-and-reports-/nationalhealthexpenddata/nhe-fact-
sheet.html, accessed April 2017.
146
The Associated Press-NORC center for Public Affairs and Research, “Finding Quality
Doctors: How Americans Evaluate Provider Quality in the United States: Research Highlights,”
http://www.apnorc.org/projects/Pages/HTML%20Reports/finding-quality-doctors.aspx, accessed
April 2017.
147
Source: Long Distance Freight Trucking in the US, IBISWorld, accessed March 2017
148
Ibid.
149
Ibid.
150
Ibid.
151
Source: Standard & Poor’s NetAdvantage, accessed March 2017.
152
Ibid.
24
153
Ibid.
154
Ibid.
155
Ibid.
156
Ibid.
157
Source: Global Consumer Electronics Manufacturing, IBISWorld, accessed April 2017.
158
Ibid.
159
Ibid.
160
Ibid.
161
Op. Cit., 10-K
162
Op. Cit., 10-K
163
164
Op. Cit., 10-K
165
Ibid.
166
Ibid.
167
Ibid.
168
Op. Cit., Semiconductor and Semiconductor Equipment
169
Ibid.
170
Source: Prepare for the Electric Car Revolution,” via Factiva, accessed March 2017.
171
Op. Cit., 10-K, p.6.
172
Ibid.
173
Ibid.
174
Ibid.
175
Ibid, p.10.
176
Ibid.
177
Source: Semiconductor Industry Profile, Bloomberg LP, accessed March 2017.
178
Op. Cit., 10-K
25
Strategic Alternatives Summary
Efficiency Strategies
ACE Consulting primarily recommends Texas Instruments to acquire the licensing rights to
Stanford University’s manufacturing process for its reusable Gallium Arsenide semiconductor due
to its enhanced efficiency performance (exhibit 19). The crystalline structure found within Gallium
Arsenide provides for a more efficient means of information transportation from the sending point
to the receiving point179 in contrast to the widely utilized pure silicone base. As an alternative
strategy to acquiring Stanford’s manufacturing process license, Texas Instruments may also decide
to enhance the efficiency of existing Internet of Things (IoT) technologies. Currently, IoT
technologies represent a new means for the transfer of data without human interaction180; in other
words, machines may transfer data without the operation of human interaction. While Texas
Instruments claims that the IoT technologies will provide great amounts of data transfer, the
technologies currently contain various challenges which currently prevent the widespread usage
of said technologies181. One of the main challenges currently faced by developers attempting to
implement the Internet of Things technology is the lack of data acceptability between receivers
such as Wi-Fi, Bluetooth, and Ethernet data points182. Given Texas Instruments extensive Research
& Development efforts, TI may research a new algorithm and system that allows for a more
efficient conversion and data transfer between the various receptors. For example, Texas
Instruments may develop a means of data transfer between Wi-Fi powered devices with Bluetooth
receivers. In doing so, Texas Instruments could become the leading provider of Internet of Things
technologies within the emerging industry. ACE Consulting ultimately decided, however, that
acquiring the license for an improved semiconductor chip proved to be the more logical and
lucrative industry as Texas Instruments’ leading business is its semiconductor design and
manufacturing businesses.
Extension Strategies
Other than the primary recommendation for Texas Instruments to create a new embedded
processor for its existing competency in healthcare devices as an extension strategy, ACE
Consulting subsequently recommends the following strategies (exhibit 19). Given Texas
Instruments vast calculator product line183, a logical strategy is to capitalize on expanding the
functionality of its calculators to create a superior competitive advantage in the educational and
professional fields. With technology industries on the rise184, the nature of problems people are
solving raise periodically day by day, and given the efficacy and widespread use of personal
assistant software such as iPhone’s Siri, Texas Instruments can combine these elements to create
a personal assistant calculator which will assist people with problem solving on the daily. By
adding an internet connection feature to the calculators, the personal assistant software may have
access to any databases provided by Texas Instruments as well as databases on the internet.
Furthermore, if Texas Instruments implements this strategy, an audio/voice component can be
added to the calculator so users may speak the question in place of typing any concerns on the
calculator interface, as the TI-Nspire is currently programmed185. An additional extension strategy
is for Texas Instruments to integrate hologram and touchscreen features to their existing TI DLP!
projector technology. Texas Instruments currently produces various projectors for consumers
within the education, corporate, and home theater markets; however, their products do not
currently allow users to make selections with their hands by pressing the projected screen image.
Texas Instruments will continue target to individuals current consumers within the education,
26
corporate, and home screen market; this product, however, will generate a new core competency
by adding the touch feature. While ACE Consulting believes this to be an innovative strategy in
combination with Texas Instruments brand name recognition in the calculator sales industry, Texas
Instruments currently operates in higher yielding sectors such as the analog industry which
generates 22% of its total revenues186. Furthermore, the medical field is a more highly lucrative
industry. Medtronic, for example, reported revenues of $5.465 from cardio vascular products in
2016187. If TI captured a percentage of sales as described in the extension strategy
recommendation, TI could generate an additional $86.35 million in sales. For these reasons, ACE
Consulting claims that investments in extending their existing healthcare products will yield higher
profit margins.
Business Segmentation
For TI’s predominant Business Segmentation strategy, ACE Consulting recommends TI to
engineer a self-driving truck due to increasing industry profits but decreasing labor supply188, and
capitalize profits in a new market for TI (exhibit 19). However, an alternative strategy may be to
adapt their existing touch screen technologies to allow for an attachable touch screen product to
computers, televisions and other devices. Texas Instruments currently owns and operates touch
screen sensors; however, TI targets these products to high functioning systems such as data
transmission units and automotive vehicles189. However. Texas Instruments does not provide this
technology to markets within the consumer electronic goods such as computers and televisions.
As an additional strategy, Texas Instruments may partner with Boeing Aircraft to create a motor
for aircraft vehicles. Currently, Texas Instruments largely operates within the automotive motor
driver design and production industry190, yet they do not currently design aircraft motor drivers.
Though the Bureau of Transportation Statistics claims that air flight consumer levels remain steady
(declaring revenues of $66.930 million in 2016 which demonstrated an increase from 2015’s
$64.974 million)191, Texas Instruments is already extremely knowledgeable in the motor vehicle
sector due to their current large participation within said sector. Additional Research &
Development costs to creating a new motor driver adaptable for aircraft would prove far too costly,
particularly given TI’s already strong competitive advantage in the automotive industry.
Business Creation
Given Texas Instruments heavy participation within the automotive industry and knowledge of
batteries in accordance to their engineering of battery supplements such as chargers192, TI may
partner with the University of Texas in order to create a new eco-friendly battery powered by glass
electrolytes (exhibit19). While ACE Consulting primarily recommends the aforementioned
strategy, Texas Instruments may also partner with leading science organizations such as JPL to
create a new Quantum Computer. In 1979, Texas Instruments designed and manufactured the TI
99- 4A computer193 but has since quit manufacturing computers. Furthermore, Google recently
partnered with NASA to create a Quantum Computer194. Therefore, if Texas Instruments worked
with a major organization such as JPL and provided a reliable Quantum Computer, TI could rival
Google’s position as a leading organization in the technology sector. Texas Instruments may also
partner with NASA to create new Space Travel Technologies. Though a plausible option for TI,
ACE Consulting declared that creating a largely efficient new genre of battery would allow for
major market penetration virtually every industry utilizing batteries.
27
Strategic Recommendations
Bio-Compatible Imbedded Processors
An Extension Strategy that will develop a new core competency within the pre-existing medical
market is the creation of an embedded processor that is tailored to implantable medical devices.
This concept will create a new embedded processor that improves overall wireless communication
of the implanted medical device, making a more consistent, reliable, and easily accessible stream
of data to both the doctor and patient. Currently, data from an implantable medical device needs
to be transcribed through a doctor because of the elaborate coded output of the information. For
example, a heart pacemaker outputs a code that tells doctors what is going on within the heart.
This code is called the Heart Rhythm Society and British Pacing and Electrophysiology Group
generic code195. The code, as shown in the table below, is directly outputted by the embedded
processing chip within the heart. Ultimately, TI seeks to transform this code into data that the
patient can easily read and access in real time which will allow for a more consistent monitoring
of the patients’ health. By designing an embedded processor that has this sustained capacity, TI
develops a new core competency- superior biocompatibility of embedded processors.

Texas Instruments currently provides a variety of reference designs that are integrated into Bedside
Patient Monitoring devices196. Applying their manufacturing knowledge (Exhibit 6), to improve
an implantable medical devices will result in industry innovation. TI has the advantage of
becoming a first mover with this innovation, per an article published in The International
Neurology Journal, “Compared with the well-known space, atmospheric, and marine
environments, the inner body is an unfamiliar and underdeveloped space to the engineer.”197 TI
already has a presence in patient monitoring devices, such as Bedside Patient Monitors to Wireless
Patient Monitors198, which has established their products as a reliable means of communicating
patient data. However, TI has yet to integrate technology into implantable medical devices. This
new embedded processor for implantable devices will make the end manufactured product superior
in reliability, a key product differentiator in the medical device manufacturing industry 199(Exhibit
15). The staging for the embedded processor will be through multiple stages. The next 3 years
of research and development will improve technology and test successful integration with
implantable devices, starting with heart pacemakers. Following 3 years of research and
development, FDA approval of the device will estimate to take between 3-7 years200. Post FDA
approval, the embedded processor that is located within the pacemaker will start to be implanted
at the Wexner Medical Center of Ohio State University. Wexner Medical Center is the leading
medical center in the nation for electrophysiology (a specialization that focuses on the electrical
system of the heart)201. The arena for this market are those in need of implantable medical devices,
specifically one of the most implanted medical devices in the United States: heart pacemakers202.
The population that is the most dependent on these heart beat regulation devices is the aging
population203, in which 70-79-year-olds have the highest growth rate at a 73.5% expected increase
28
by 2030204(Exhibit 11). Medtronic is a leading manufacturer of pacemakers in the US205; thus the
vehicle of a joint venture for this development will benefit both parties. Throughout the R&D and
selling of the final product, TI will retain a patent for the improved embedded processor. In 2016
Medtronic reported $9.142 billion in sales206. The joint venture proposes that TI become the main
embedded processor supplier for Medtronic, meaning that they could receive half of the 0.67% of
COGS that Medtronic currently spends on embedded processors207 . If TI’s joint venture captures
the equivalent of 0.335% of the cost of goods sold from Medtronic’s revenue (estimated to be
$9.142 billion), TI can add $30.63 million in sales (economic logic). Yet, this expected revenue
is undervalued, as the aging populations demand for these devices will increase. The competitive
advantage of superior reliability will also increase product demand for both TI’s embedded
processors and the Medtronic devices that integrate them208.
Self-Automated Road Freight

For the market segmentation strategy, the concept is for Texas Instruments to develop the
technology, with a focus on proper processor and sensor hardware, for a self-driving semi-truck
for the road freight industry. Its existing competencies in sensors, embedded processors, and
analog devices make them an ideal candidate to enter a new business market, road freight. Data
shows that there is a massive shortage truck driver workforce since 2005209. Additionally, the
workforce in the industry is on average 55 years old210. Advancements in machine learning make
self-driving truck technology foreseeable, helping resolve driver shortages. Analog and embedded
processor are key components for tracking and robotics devices. Driver wages also account for
25% of industry revenues in the US211. This is one of the main reasons profit margins are expected
to fall by 1.5% in the next five years, while revenue is expected to grow by 2.1% and reach $202
billion by 2021212. Reducing this cost of driver wages through a high-tech, reliable product stands
to gain substantial profits. Competition in road freight is high, (Exhibit 16), and one of the main
pressures that pushes margins down. Large companies exist, but the market is highly fragmented,
with no company holding more than 1% of total market share213. 25% of driving companies are
sole proprietorships214, meaning drivers buy a truck from manufacturers, often through large loans,
and act as owner-operators, obtaining jobs through distribution channels. All these small players
compete against each other for jobs, keeping profit margins low. Trucking is an irreplaceable
service for the economy, both international and domestic. Global imports have risen steadily, and
¼ of goods come to ports on the west coast215, and then need to be moved across country. Retail,
manufacturing, industrial productions all rely on trucking transportation for accurate and timely
shipments of both finished products, as well as raw materials and intermediate goods216. But
regulation has increased to protect drivers from overwork, as well as improve road safety217 by
enforcing an 11-hour daily cap for every driver218. Numerous startups, some backed by technology
companies like Uber and Alphabet, are already attempting to outfit trucks with machinery to allow
the truck to drive themselves for long stretches219. This would allow a driver to stretch the 11-hour
rule, curb costs from paying multiple drivers, and improved delivery times. However, this
competition has been slow to start because experts with the necessary robotics skills are few220.
The arena would be in trucking transportation. Many fleet managers aggressively pursue
opportunities to curb operating costs and remain debt free221, making them ideal candidates to
pursue self-driving technology. The vehicle to help TI gain a leg up in the race is to initiate R&D
through a joint venture newly combined trucking conglomerate, Knight-Swift Transportation
Holdings Inc. Swift was the fifth largest trucking company in the US, and Knight the 22nd222.
Combined the company owns 23,000 trucks and 77,000 trailers, along with 28,000 employees223.
29
TI’s historical success with R&D, and ability to customize products and manufacture at scale to
meet the needs of the other company could accelerate the process for Knight-Swift as it forges
ahead to identify new ways to lower wage costs. Staging would begin with a year and a half for
R&D and testing to prove consistency and safety of the autonomous machine to drive a semi-truck
on main highways. This timing, along with brand recognition from both sides would also be a
differentiator when government regulators inspect autonomous technology for clearance on the
nation’s highways. Sequencing would be for Knight-Swift to outfit its own fleet first, and for TI
to obtain patents for certain processors and sensors. Economic Logic of this strategy starts by
reducing the cost of driver wages, $50 billion (25% of industry revenues)224. Even robot pilot
systems that can operate trucks for half of a trip could double truck hours on the road, and in turn
cut wages by half. Fleet owners and buyers of freight services, primed to cut the budget of driver
wages in half, $25 billion of the $50 billion put towards driver wages for the industry, will pay a
premium for this technology. TI, overseeing R&D, could profit greatly by securing patents and
charging royalties If 10% of industry savings were received by TI, $2.5 billion in revenues could
be gained. Once developed, patents could also distribute the technology to large fleet owners.
Many companies do this type of reverse vertical integration already.
Energy Efficient Battery Manufacturing

The next strategy is for TI to enter the lithium ion battery industry. It would form a strategic
partnership with a research team at the University of Texas lead by John Goodenough who has
developed a new battery with at least three times the energy density as today’s lithium ion
batteries225. The research team seeks to adapt this technology for car batteries; greater density
positively correlates with driving range, so a higher energy density means more miles between
charges226. What differentiates Goodenough’s battery from others is that it relies on glass
electrolytes rather than liquid electrolytes, which eliminates the threat of explosions and fires227.
Most importantly, the battery can be made with earth-friendly materials which allows for the
substitution of lithium for low-cost sodium that can be extracted from seawater228. Growth in the
battery industry is being driven by the high demand for efficient battery management systems in
electric vehicles229 (Exhibit 17). Automakers are looking to compete with companies like Tesla to
produce electric vehicles with long battery life, but are struggling to be competitive230. Currently,
Tesla’s Model 3 and the Chevrolet Bolt have ranges around 200 miles231. The Volkswagen e-Golf,
the Chevrolet Spark and the BMW i3 only have ranges around 80 miles per charge232. Due to the
higher demand for energy-efficient, safe, and low cost batteries233, and auto-makers investing
significant capital into research and development toward their creation, it would be beneficial for
TI to develop car batteries for these automakers. This strategy will require TI to manufacture
batteries. While it already has experience creating battery management systems, this strategy will
expand its manufacturing to produce an end product. The target arena will be car manufacturers
(Exhibit 11). The vehicle for implementing this strategy will be a strategic partnership with
Goodenough’s team through a joint venture. The team fits TI’s requirements for partnerships in
that the battery is within TI’s target market of energy and automotive. Goodenough’s team has the
patent for their technology and the research capabilities to complement TI’s current competencies
in developing the analog features of batteries. Further, Goodenough’s team is looking to partner
with battery manufacturers to develop its battery making a joint venture appealing234. The staging
for the joint venture will require 4 months during which TI will work with Goodenough’s team
who are readily searching for battery manufacturers to develop their technology in car batteries235.
Upon completion of the joint venture, TI will pour resources into research and development to
30
create a working model for a car battery that can be revealed at the Frankfurt Internationale
Automobil-Ausstellung in September, 2017. The differentiator for this strategy is that it will create
a new core competency for TI, the creation of car batteries. While TI currently produces inputs
purchased by battery manufacturers, this will give it greater control in the industry that will
complement its current business segments. Further, the battery creation segment could eventually
expand to create batteries for uses other than powering electric vehicles. The joint venture provides
economic logic because of the low cost required to create a battery under Goodenough’s patent
coupled with the fact that the battery market generates $85 billion in annual revenue and forecasts
growth to $120 billion by 2019236. TI would capture 2% of the market share generating $2.4 billion
in revenue by 2019. This strategy would increase TI’s market share, expand its product line, and
enhance its position in relation to competitors.
Acquisition Strategy
As of 2016, the semiconductor industry reached maturity in its life cycle237. With industry value
added rates growing at a much slower pace of 0.9% (in contrast to the United States' GDP rate of
3.1% throughout 2021238), organizations operating within this space are increasing merger and
acquisition (M&A) activities in order to “integrate their operations into new areas of the value
chain, among the slow revenue environment”239. Despite 2016’s projected 2% revenue decline240,
several pockets within the semiconductor industry continue to drive sales, particularly due to the
emergence of the Internet of Things (IoT) and its enabling technologies as more people strive to
connect their devices together. For example, the growing ability to connect their wearable fitness
technologies to their phones and computers is an illustration of IoT at work. By 2017, over one
billion devices will be connected in comparison to 2015’s 294.2 million devices241, with a
projection of over 75 billion devices in 2025242. The IoT’s enabling technologies compose a large
portion of the industry’s global electronics parts manufacturing. Overall, a forecasted annualized
growth of 1.6% throughout 2021, will increase the semiconductor industry’s profitability to $665.4
billion243.
Although Texas Instruments produces some of the technologies essential to the development of
the IoT, such as wireless connectivity devices, TI’s predominant business segments are its analog
and embedded processors which account for 64% of its 2016 total revenues244. Therefore, the
concept is to enhance Texas Instruments competitive advantage in the growing IoT technologies
industry through the vehicle of an acquisition of Skyworks Solutions. Skyworks Solutions is
dedicated to producing wireless connectivity engines such as wireless infrastructure and WiFi
connectivity to connected home and automation utilizing smart energy245. These connectivity
engines are foundational pieces to the implementation of the emerging cloud of devices. The
differentiator for this strategy is that Texas Instruments will gain a robust competitive advantage
in the growing segments of the otherwise stagnant semiconductor industry. Some of Texas
Instruments largest competitors such as Intel already have made a step towards capitalizing on this
concept. Intel currently provides “IoT Industry Solutions for Smart Manufacturing” and “efficient
and secure buildings”246, which have strengthened Intel’s position as the leading competitor of the
semiconductor industry. Its IoT segment generated revenues of $726 million in 2016’s final quarter
alone247. Because Skyworks predominantly operates within the IoT enabling technology segment,
its net revenues of $3.289 billion for 2016 would increase TI’s market share248, therefore
competing against Intel and other rivals. Given Skyworks current technologies and current target
markets, Texas Instruments will be able to operate in arenas such as aerospace and defense,
automotive, building infrastructure, consumer electronics, medical. The staging of this venture
31
would require negotiations for acquisition costs, combinations of organizational cultures, which
would in all require about four months. Because Skyworks already manufactures wireless
connectivity, expanding upon those existing competencies will expedite sales instantly. After
performing an acquisition model which provides the economic logic, Texas Instruments’ Net
Present Value is $4.59 billion (Exhibit 18). In 2020, TI would generate $5.2 billion in revenues
after the 2 year 10-month payback period; thereafter, revenues are forecasted to increase at an
average annual growth rate of 9.7% as the underlying economic indicator utilized for revenue
forecast (US GDP PPP) increases.
32
Conclusions
In summary, TI retains an 11% market share of the semiconductor industry, which drives its core
competencies. To highlight a few competencies, large capital investments and highly equipped
engineering staff allows TI to dominate in various markets, particularly within the Analog industry,
which accounts for 22% of TI’s revenues. Texas Instruments’ strong investments in Research and
Development enable its success in the analog business sector249. In 2016, Texas Instruments
allocated $1.6 billion, approximately 10% of revenues, to R&D activities alone250. With core
competencies such as high-level engineers and strong international presence along with an
extensive patent portfolio of over 40,000 patents251, Texas Instruments can develop innovative
semiconductors, digital signal and light processors, analog and microcontroller chips, as well as
embedded processing chips. Given these core products, Texas Instruments may operate within
corresponding segments such as the automotive, industrial, and communications industries252.
Texas Instruments operates as the third largest firm in the semiconductor industry253, which
collected $359 billion in revenues in 2016254. Semiconductor competition is intense, and will only
stiffen now that major technology hardware segments reach maturity and growth decelerates255.
Certain segments will see pockets of high growth, like the advancement of driver assistance in the
automotive industry, and automation in industrial warehouses256. To collect these increases,
consolidation is expected257 from large incumbents.
The extension strategy recommends Texas Instruments to capitalize on its existing presence in the
Medical Industry. By improving biocompatibility of embedded processors, within heart
pacemakers, TI can lead the way for innovation through implantable medical devices. A joint
venture with Medtronic would help TI extend its competencies and improve embedded processors.
The business segmentation strategy advises TI to engineer a self-driving truck due to increasing
industry profits but decreasing labor supply258, and capitalize profits in a new market. TI would
not be manufacturing the trucks, but will produce high functioning systems such as data
transmission units and automotive semiconductors to ensure a safe and effective autonomous semi-
truck.
The business creation strategy recommends TI to partner with the University of Texas in order to
create a new eco-friendly battery powered by glass electrolytes. TI has partnered with other
organizations and companies in the past, but ACE believes fusing technologies with the University
of Texas will create a unique and efficient battery that the market has yet to see.
The acquisition strategy recommends TI to acquire the company Skyworks Solutions in order to
enhance TI’s competitive advantage in the Internet of Things (IoT) technology and wireless
communication business segment. In 2020, TI would generate $5.2 billion in revenues after the 2
year 10-month payback period.
ACE Consulting believes these strategies parallel and contribute towards TI’s vision of
“[improving] people’s lives in every region of the world through integrity, innovation and
commitment.”
33
Endnotes to Summaries and Strategies
179
Tom Abate. “New Stanford manufacturing process could yield better solar cells, faster chips,”
Stanford News, March 24, 2015, http://news.stanford.edu/2015/03/24/chips-laser- lift-032415/
accessed March 2017.
180
Source: Internet of Things Overview, Texas Instruments, accessed March 2017,
http://www.ti.com/ww/en/internet_of_things/iot-overview.html
181
Ibid.
182
Ibid.
183
Texas Instruments, “Calculator Products”, accessed March 2017.
https://education.ti.com/en/products
184
Source: Semiconductors & Semiconductor Equipment Industry Surveys, S&P Global,
185
“TI-Nspire CS CAS Handheld”, Texas Instruments,
https://education.ti.com/en/products/calculators/graphing-calculators/ti-nspire-cx-cas, accessed
March 2017.
186
Source: Data Monitor
187
Medtronic, December 31, 2016, Form 10-K, pg 45, accessed March 2017.
188
Source: Long Distance Freight Trucking in the US, IBISWorld, accessed March 2017.
189
Products for Touch Screen Controllers, Texas Instruments, accessed March 2017,
http://www.ti.com/lsds/ti/data-converters/special-data-converters/touch-screen-controllers-
products.page
190
Source: Motor Drivers, Texas Instruments, accessed March 2017.
http://www.ti.com/lsds/ti/analog/motordrivers/overview.page
191
Source: US Air Carrier Traffic Statistics throughout November, United States Department of
Transportation, accessed March 2017, https://www.transtats.bts.gov/TRAFFIC/
192
Source: Battery Management Solutions Overview, Texas Instruments, accessed March 2017.
http://www.ti.com/lsds/ti/power-management/battery-management-products-overview.page
193
Source: History of Innovation, Texas Instruments, accessed March 2017
http://www.ti.com/corp/docs/company/history.html
194
Source: NASA Quantum Artificial Intelligence Laboratory (QuAIL), National Aeronautics
and Space Administration, accessed March 2017, https://ti.arc.nasa.gov/tech/dash/physics/quail/
195
Anjan S, Batra and Sheshadri Belaji, “ Postoperative temporary epicardial pacing: When, how
and why?” Annals of Pediatric Cardiology 1.2 (2008): 120–125, Web. accessed April 2017.
196
Texas Instruments, “Medical, Healthcare, and Fitness Overview,”
http://www.ti.com/lsds/ti/applications/industrial/medical/overview.page, accessed March 2017.
197
Yeun-Ho, Joung,. “Development of Implantable Medical Devices: From an Engineering
Perspective.” International Neurourology Journal 17.3 (2013): 98–106, Web, accessed March
2017.
198
Texas Instruments, “Medical, Healthcare, and Fitness Overview.”
199
Source: Medical Device Manufacturing in the US Industry Report, IBISWorld, accessed
March 2017.
200
Kyle, Fargen, Donald, Frei, David, Fiorells, Cameron, McDougall, Phillip, Myers, Joshua
Hirsch, and J Mocco , “The FDA Approval Process for Medical Devices,” Medscape,
http://www.medscape.com/viewarticle/807243_2, accessed March 2017.
34
201
Ohio State University Wexner Medical Center, “Pacemaker: What is a Pacemaker?”
https://wexnermedical.osu.edu/heart-vascular/conditions-treatments/pacemaker, accessed March
2017.
202
Business Insider, “The 11 Most Implanted Medical Devices in the America,”
http://www.businessinsider.com/the-11-most-implanted-medical-devices-in-america-2011-7#9-
heart-pacemakers-3, accessed March 2017.
203
Amy, Norton, “More Americans getting Pacemakers,” Reuters,
http://www.reuters.com/article/us-more-americans-getting-pacemakers-
idUSBRE88P1LN20120926, accessed March 2017.
204
205
Medtronic, December 31, 2016, Form 10-K,p.1,
file:///C:/Users/meric/Downloads/Medtronic%20plc%20FY16%2010-
K%20and%20Shareholder%20Letter.pdf, accessed March 2017.
206
Op. Cit., “Medtronic, December 31, 206, 10K”
207
Source: Bloomberg LP, accessed March 2017.
208
Source: Medical Device Manufacturing in the US.
209
210
Ibid
211
Ibid
212
Ibid
213
Source: North American Trucking Primer, Bloomberg LP, accessed March 2017
214
Ibid
215
Op. Cit., Long Distance Freight Trucking in the US
216
Source: Road Freight in the United States, Marketline Industry Profile, accessed March 2017
217
Ibid
218
William Vantuono. “Autonomous Trucks – Sooner than You Think”, RailwayAge, Feb. 24,
2017, http://www.railwayage.com/index.php/intermodal/autonomous-trucks-sooner-than-you-
think.html, accessed March 2017
219
Tim Higgins. “Self-Driving-Truck Startups Race to Take on Uber”, WSJ, March 2, 2017,
https://www.wsj.com/articles/self-driving-truck-startups-race-to-take-on-uber-1488466802,
accessed March 2017
220
Mike Ramsey. “Autonomous Vehicle Startup Drive.ai Licensed to Test in California”, WSJ,
April 22, 2017, https://www.wsj.com/articles/autonomous-vehicle-startup-drive-ai-licensed-to-
test-in-california-1461332131, accessed March 2017
221
Paul Page, “Truckers Swift and Knight to Merge”, WSJ, April 9, 2017,
https://www.wsj.com/articles/truckers-swift-and-knight-to-merge-1491796861, accessed April,
2017
222
Ibid
223
Lauren Gensler, “Knight, Swift Transportation Merge to Create $5 billion Trucking Giant”,
Forbes, April 10, 2017, https://www.forbes.com/sites/laurengensler/2017/04/10/knight-
transportation-swift-transportation-trucking-merger/#3470e1d23b04, accessed April 2017
224
Op. Cit., Long Distance Trucking in the US
225
Sandra Zaragoza, “Lithium-Ion Battery Inventor Introduces New Technology for Fast-
Charging, Noncombustible Batteries,” UTNews, February 28, 2017.
226
Op. Cit., Sandra Zaragoza.
35
227
228
229
Source: “Battery Management System Market by Battery Type, Component, Topology,
Application, and Geography – Global Trend and Forecast to 2022,” Mark and Markets, accessed
March 2017.
230
Stephen Wilmot, “Prepare for the Electric-Car Revolution,” The Wall Street Journal,
231
Brian Fung, “A Cure for Electric-Car Range Anxiety,” The Washington Post, accessed March
2017.
232
Source: Battery Manufacturing, via Market Research, accessed March 2017.
233
Op. Cit., “Battery Management System Market by Battery Type, Component, Topology,
Application, and Geography – Global Trend and Forecast to 2022.”
234
235
Ibid.
236
Ibid.
237
Global Semiconductor & Electronic Parts 2016, Ibis World, accessed April 2017
238
Ibid.
239
Semiconductors & Semiconductor Equipment Industry Survey, S&P Global, accessed April
2017
240
Ibid.
241
Ibid.
242
2016 Annual Report, Skyworks, accessed April 2017
243
Op.Cit., Ibis world, pg. 4
244
Texas Instruments Incorporated Company Profile, Business Source Premier, accessed April
2017
245
Op. Cit., 2016 Annual Report, pg. 3
246
“The Internet of Things (IoT) Starts with Intel Inside”, Intel, accessed April 2017
http://www.intel.com/content/www/us/en/internet-of-things/overview.html
247
Tilley, Aaron, “Intel Beats Revenue Estimates”, Business Source Premier, electronically
published 1/26/2017, accessed April 2017
248
Skyworks Solutions Company Financials, Mergent Online, electronically published
September 2016, accessed April 2017
249
Source: Texas Instruments Incorporated SWOT Analysis, LexisNexis Academic, accessed
March 2017.
250
Ibid.
251
“History of Innovation”, Texas Instruments,
http://www.ti.com/corp/docs/company/history.html, accessed March 2017.
252
Op. Cit., “Texas Instruments Inc. Corporate Description”, pg. 3
1
Source: Texas Instruments Inc. Stock Report, S&P Capital IQ, accessed March 2017.
254
Source: Texas Instruments Incorporated Company Profile, DataMonitor, accessed March
2017.
255
Source: Semiconductors and Semiconductor Equipment, S&P Capital IQ, accessed March
2017
256
257
Ibid
258
36
Exhibits
1.! SWOT
2.! VRIO
3.! HR
4.! Value Chain
5.! 4Ps
6.! Core Competence Map
7.! BCG
8.! Competitive Industry Analysis
9.! Competitive Map
10.!Semiconductor Porters
11.!Target Market
12.!TI Accounting Statements
13.!Skyworks Solutions Accounting Statements
14.!Ratios
15.!Medical Devices 6 Forces
16.!Self-Automated Road Freight 6 Forces
17.!Lithium Ion Battery 6 Forces
18.!Financial Acquisition
19.!Core Competence Strategies
20.!CASE Analysis
37
Strengths Weaknesses
Strong Market Share in Total Industry Competitors
1.! In 2016, Texas Instruments held an 11% market share of 1.! In 2016, Texas Instruments held an
the semiconductor industry.1 H 11% market share in the semiconductor
2.! Intel, Qualcomm, and Texas Instruments control 62% of industry.22 H
the semiconductor industry.2 H Patent Infringement Lawsuits
Embedded Processors and Analog Segments 2.! Various lawsuits from competitors
3.! Texas Instruments analog segment accounted for 64% of claiming Texas Instruments’
total revenues generated in 20163 and captured 18% of infringement of patent law
analog semiconductor market4 H compliance.23 L
4.! Captured 17% of fragmented market share of embedded 3.! MEC sues Texas Instruments for a total
processors5 H of $94 million.24 M
Research and Development Financial Trends
5.! Allocated $1.3 billion of revenues (aprox. 10%) to R&D 4.! Cash and Cash Equivalents decreased
activities.6 M 29% in past three years.25 M
Increasing Operational Performance Increasing Doubtful Accounts Receivable
6.! Operating profits increased 22% from 2014-2016.7 H Ratios
7.! Operating margins increased from 30.2% to 32.9% in 5.! Taken as a measure of accounts
2015.8 M receivable allowances over accounts
Developed Manufacturing Capabilities receivables, gross, ratios increased to
8.! Semiconductor factories in North America, Asia 1.32% in FY2016 from 0.60% in
(primarily Japan), and Europe.9 H FY2015.26 M
9.! Strong manufacturing capabilities in growing technology Excess Inventory
regions in Asia. 10H 6.! Increased company risk due to excess
10.!“Flexible Manufacturing Capabilities”11so majority of inventory in various distribution
production is in-house or outsourced relative to demand to channels.27 M
enhance efficacy of production.12M 7.! Difficult to match inventory &
11.!Industry’s largest market channels with the broadest production to fill orders.28 M
reach.13 H Customer Range
Cost Reducing Capabilities 8.! Nokia generates 21% of TI’s
12.!In 2009, TI developed the 300mm wafer which allows for revenues.29 L
a 40% reduction in costs compared to current 200mm 9.! Change in demand in wide range of end
wafer manufacturing.14M markets can affect overall operations.30
Diversified Product Lines and Ends Markets M
13.!Diverse line of semiconductor products.15 M Debt and Costs
14.!Vast Array of Nodes, Gateway Routers, and Cloud 10.!Debt securities or issues with various
Software.16 H interest rates and maturities.31 M
Consistent New Products and Patents 11.!Increases in health care and pension
15.!Three strong product launches in 2015 provided stronger benefit costs.32 M
market share.17 H Excessive International Reliance
Employee Relations 12.!Heavy reliance on manufacturing and
16.!Recognized as one of the 50 best places to work by sales at international locations.33 M
Glassdoor18 H Employee Retention
17.!93% CEO approval rating19 H 13.!Retain and recruit sufficient number of
18.!3.9 star approval for Texas Instruments20 M qualified employees. 34 L
Financial Ratios
38
19.!In 2016, revenues grew by 2.8%, marginally adding $370
million to TI’s base revenues of $13 billion.21 M
Exhibit 1: SWOT
39
Opportunities Threats
Forecast of Semiconductor Industry Mature Semiconductor Industry
1.! Global semiconductor industry totaled $359 billion in 1.! Slow industry growth of 0.9%
2016, and is forecasted to increase 3%.35 H throughout 2021 compared to US
2.! Foreign demand for chip containing products such as GDP’s value of 3.1%47H
automotive vehicles and smartphones to increase.36 H Intense Market Competition
3.! Asia generates 40% of the global semiconductor chip 1.! Intel and Qualcomm dominate
demand.37 H industry, with Broadcom’s close
Electronic Automotive Industry behind.48 H
4.! Throughout 2021, industry trade is projected to 2.! Fragmented market with large and
increase at an annualized rate of 2.7% to $293.3 small competitors. 49 H
billion as mechanical devices are replaced with Foreign Regulations & Currency
electronics.38 H Fluctuations
Strengthening Global LTE Market 3.! Global currency fluctuations.50 M
5.! Global LTE industry is to generate $997 billion by 4.! Re-measurement of non-U.S. dollar
202039 with CAGR estimated at 58.2% throughout transactions.51 L
2013-2020 40 H Cyclicality of Semiconductor Industry
Internet of Things (IoT) Growth 5.! Industry is naturally volatile.52 M
6.! IoT software programs to generate $662 billion in 6.! Competition in niche markets.53 M
2021, with a CAGR of 33% throughout 2021.41 M Tumultuous Global Economies
Growing Geriatric Demographic Segments 7.! Global issues, such as Thailand’s
7.! Social sectors reliant on heart pacemaker floods in 2011, stalled the already
technologies utilizing semiconductors, those ages 70- maturing semiconductor industry’s
79, are expected to grow at a rate of 73.5% by 2030 revenue margin. 54 H
in the United States.42M 8.! Industry revenues in European
Medical Sector market declined in 2015, with
8.! Semiconductor enabled technology is transforming CAGR of -1/2%.55 H
healthcare industry through development of more Competitor’s Investments in IoT
powerful devices.43M Technology
Asia’s Dominance 9.! Intel currently generates over $700
9.! Industry employment in Asia is expected to grow to million in Internet of Things
6.2 million employees in the next five years, annual enabling technologies, gaining
rate of 2.2%.44M competitive advantage in growing
10.!Industry trade in China is forecasted to reach $257 concept.56 M
billion through 2021, annual rate of 0.2%.45M
11.!North Asia generates 51.1% of industry revenues.46M
40
Endnotes for SWOT
1
Op. Cit., “Semiconductors & Semiconductor Equipment Industry Surveys”, pg. 10
2
Source: Semiconductors & Semiconductor Equipment Industry Surveys, S&P Global, accessed March 2017.
3
Source: Texas Instruments Inc, Form 10-k. Mergent. February 23, 2017, accessed March, 2017, page 2.
Source: Texas Instruments Incorporated SWOT Analysis, LexisNexis Academic, accessed March 2017.
4
Op. Cit., “Texas Instruments Inc, Form 10-k.” Page 2.
5
Op. Cit, “Texas Instruments Inc, Form 10-k.” page 3.
6
Op. Cit., “Texas Instrument Incorporated SWOT Analysis.”
7
Ibid.
8
Ibid.
9
Op. Cit., “Texas Instruments Incorporated Company Profile”, pg. 4
10
Source: Global Semiconductor & Electronic Parts Manufacturing, Ibis World, published 2016, accessed April 2017
11
Source: Texas Instruments Company Manufacturing, Texas Instruments, accessed March 2017.
http://www.ti.com/corp/docs/company/manufacturing.html#flexibility
12
Ibid.
13
“Investor Relations Overview”, Texas Instruments, published 2016, accessed April 2017
14
“Texas Instruments Investor Relations”, Texas Instruments, published 2014, accessed April 2017,
http://www.ti.com/corp/docs/investor_relations/downloads/investor_overview.pdf
15
Ibid.
16
Ibid.
17
Ibid.
18
“Awards 2012-2016,” Texas Instruments, http://www.ti.com/corp/docs/company/awardfactsheet.shtml#citizenship,
accessed March 14, 2017.
19
Texas Instruments Reviews, Glassdoor, accessed April 2017, https://www.glassdoor.com/Overview/Working-at-
Texas-Instruments-EI_IE651.11,28.htm
20
Ibid.
21
Op. Cit., “Texas Instruments Inc. Form 10-k”, pg. 3
22
23
Ibid.
24
Source: Court Rules for TI in Patent Case Brought by Licensing Company, Texas Instruments, accessed March
2017.
25
Ibid.
26
Source: Texas Instruments Inc., Allowance for Doubtful Accounts Receivable, Stock Analysis on Net, accessed
March 2017.
27
Source: Texas Instruments Incorporated Company Profile, DataMonitor, accessed March 2017.
28
Texas Instruments Inc., December 31, 2016 Form 10-K, pg. 10.
29
Op. Cit., “Texas Instruments Incorporated Company Profile”
30
Op. Cit., “Texas Instruments Inc.” pg. 10
31
Ibid.
32
Ibid.
33
Op. Cit., “Semiconductor & Circuit Manufacturing in the US.”
34
Ibid.
35
Op. Cit., “Texas Instruments Incorporated Company Profile.”
36
Ibid.
37
38
Source: Global Semiconductor & Electronic Parts Manufacturing, Ibis World, published
39
Ibid.
40
Source: LTE Market Share, Size, Analysis and Growth 2020, Allied Market Research, accessed March 2017.
41
41
Ibid.
42
Source: The United States of America in 2030: The Future Demographic, via Euromonitor International, accessed March 2017.
43
Op. Cit., “Global Semiconductor & Electronic Parts Manufacturing”, pg. 8
44
45
Op., Cit., “Global Semiconductor & Electronic Parts Manufacturing”, pg 17
46
Ibid.
47
48
Ibid.
49
Op. Cit., “Texas Instruments Inc.” pg. 9.
50
Ibid.
51
52
Op. Cit., “Semiconductor & Circuit Manufacturing in the US.”
53
54
Op. Cit., “Global Semiconductor & Electronic Parts Manufacturing”, pg 5
55
Source: Semiconductors in the United States, MarketLine, Industry Profile, published June 2016, accessed April
2017
56
“Internet of Things – Overview”, Intel, accessed April 2017, http://www.intel.com/content/www/us/en/internet-of-
things/overview.html
Exhibit 2: VRIO
43
Exhibit 3: HR Staffing315
Richard (Rich) K. Templeton, serves as Chairman, President and Chief Executive Officer of
Texas Instruments Incorporated (''TI''). Mr. Templeton has been a Director of Texas Instruments
Incorporated since 2003 and Chairman since 2008. Mr. Templeton has served as the President
and Chief Executive Officer in May 2004. Mr. Templeton serves on the Board of the
Semiconductor Industry Association, the Board of Directors of Catalyst, and the Board of
Trustees of Southern Methodist University and Southwestern Medical Foundation. Mr.
Templeton is also a member of the Business Roundtable and the Dallas CEO Roundtable. From
April 2000 through April 2004, Mr. Templeton was Chief Operating Officer of TI. Mr. Templeton was Executive
Vice President of Texas Instruments Inc. and President of TI's Semiconductor business from June 1996 through
April 2004. Mr. Templeton is credited with helping to define and execute TI’s strategy to focus on semiconductors
for signal processing. Operationally, he guided the company during this transformation. Later as Chief Executive
Officer, he continued to reshape Texas Instruments Inc., focusing resources on growth opportunities in Analog
and Embedded Processing while repositioning its Wireless business on growth areas in the smartphone market.
Throughout this process, he has maintained Texas Instruments Inc.'s strategic investments in R&D and
manufacturing, while expanding the size of its sales and applications engineering team to better serve our
customers. Under his leadership, TI has emerged stronger, with better technological and product positions in each
of these core businesses. Mr. Templeton spent his operational career in Texas Instruments Inc.'s Semiconductor
business, beginning in sales and eventually becoming president of the entire business. Mr. Templeton topped the
list of Institutional Investor’s Best Semiconductor CEOs in America for three consecutive years from 2007
through 2009.
Brian T. Crutcher, serves as the Executive Vice President and Chief Operating Officer of
Texas Instruments Incorporated (TI). On January 19, 2017, Texas Instruments Incorporated's
Board of Directors elected Mr. Crutcher to the position of Chief Operating Officer, effective
immediately. Mr. Crutcher has been Executive Vice President responsible for all business and
sales operations, as well as for Kilby Labs and information technology. He joined TI in 1996.
He earned a Bachelor of Science in electrical engineering from the University of Central Florida
(UCF) and a Master of Business Administration from the University of California, Irvine.
Neils Anderskouv, has served as Senior Vice President of Texas Instruments Incorporated
(''TI'') since January 19, 2017. Prior to this role, Mr. Anderskouv served as Senior Vice President
of TI’s High Volume Analog and Logic business. Throughout his career at TI, he has served in
a variety of business leadership roles in the Analog and Embedded Processing organizations
including Vice President of the Digital Signal Processing business and Vice President of the
Digital Consumer Electronics Solutions business in Japan. Mr. Anderskouv joined TI in 2000
following the company’s acquisition of Toccata Technology in Denmark where he served as
president and chief executive officer. Mr. Anderskouv earned a Master of Science in electrical
engineering from the Technical University of Denmark and holds several patents in the area of power electronics.
Stephen (Steve) A. Anderson, is the Senior Vice President of Texas Instruments Incorporated
(TI), responsible for the High Volume Analog and Logic business, the Central Analog Services
teams, as well as the DLP® Products and Education Technology businesses. Prior to this role,
he served as the Senior Vice President of the Analog business. Throughout his career, Mr.
Anderson has held several other TI leadership positions within the company's Analog division,
including senior vice president of the Power Management business. Mr. Anderson joined TI in
1999 following the company’s acquisition of Chicago-based Power Trends where he served in
a number of management positions including Corporate Controller and Chief Information Officer. In addition to
his role at TI, he serves on the board of directors for the Visiting Nurses Association of Dallas. Mr. Anderson
44
earned a bachelor's degree in information systems from Drake University in Des Moines, Iowa. He is also a
certified public accountant.
Ellen L. Barker, has served as Chief Information Officer and Senior Vice President of Texas
Instruments Incorporated ("TI") since May 2014. Ms. Barker joined TI in 1984. In addition to
her role at TI, she is on the board of directors for High Tech High Heels and Tech Titans. Ms.
Barker served as Chairman, Chief Executive Officer and President of National Semiconductor
Corporation since September 23, 2011. Ms. Barker served as Controller for TI's Silicon Valley
Analog business in Santa Clara, Calif. Ms. Barker led the integration of Santa Clara, Calif.-
based rival National Semiconductor Corp. after it was acquired by TI in late 2011. She holds a
Bachelor of Business Administration from the University of Texas, Austin and a Master of Business
Administration from the University of Dallas
45
Board of Directors316
Richard K. Templeton, As a 35-year veteran of the semiconductor industry, serving the last 20 years at a senior
level at the company, including as chairman since 2008, CEO since 2004 and director since 2003, has developed
a deep knowledge of all aspects of the company and of the semiconductor industry.
Christine Todd Whitman, a highly valued director since 2003, has attained the age of 70 and is therefore
ineligible under the company's by-laws to stand for re-election at the 2017 annual meeting. Christine Todd
Whitman, As Administrator of the Environmental Protection Agency (2001-2003) and Governor of the State of
New Jersey (1994-2000), has gained first-hand experience managing a large, complex organization and developed
keen insight into the workings of government on the federal and state level and how they might impact company
operations. As a director of S.C. Johnson & Son, Inc. (2003-present) and United Technologies Corp. (2003-
present), has helped oversee the strategy and operations of other large corporations.
Daniel A. Carp, as chairman and CEO (2000-2005) and president (1997-2001, 2002-2003) of Eastman Kodak
Company, has gained first-hand experience in managing a large, multinational corporation focused on worldwide
electronics markets, with ultimate management responsibility for the corporation's financial performance and its
significant investments in capital and R&D. As chairman of the board of directors of Delta Air Lines, Inc. (2007-
present), a director of Norfolk Southern Corporation (2006-present) and a director of Liz Claiborne, Inc. (2006-
2009), has helped oversee the strategy and operations of major multinational corporations in various industries,
including some that are capital-intensive.
Wayne R. Sanders, As chairman (1992-2003) and CEO (1991-2002) of Kimberly-Clark Corporation, has gained
first-hand experience in managing a large, multinational consumer goods corporation, with ultimate management
responsibility for its financial performance and its significant capital and R&D investments. As chairman of Dr
Pepper Snapple Group, Inc. (2008-present) and a director of Belo Corporation (2003-2013), has helped oversee
the strategy and operations of other large corporations.
Carrie S. Cox, As chairman (2013-present), CEO and a director (2010-present) of Humacyte, Inc., executive
vice president and president of Global Pharmaceuticals at Schering-Plough Corporation (2003-2009) and
executive vice president and president of Global Prescription Business at Pharmacia Corporation (1997-2003),
has gained first-hand experience in managing large, multinational organizations focused on medical-related
markets, with responsibility for those organizations' financial performance and significant capital and R&D
investments. Is also a director of Cardinal Health, Inc. (2009-present) and Celgene Corporation (2009-present).
Pamela H. Patsley, As executive chairman (2016-present) and chairman and CEO (2009-2015) of MoneyGram
International, Inc., senior executive vice president of First Data Corporation (2000-2007) and president and CEO
of Paymentech, Inc. (1991-2000), has gained first-hand experience in managing large, multinational
organizations, including the application of technology in the financial services sector, with ultimate management
responsibility for their financial performance and significant capital investments. As Audit Committee chair at
the company (2006-April 18, 2013), a member of the audit committee at Dr Pepper Snapple Group, Inc., chief
financial officer of First USA, Inc. (1987-1994) and an auditor at KPMG Peat Marwick for almost six years before
joining First USA, has developed a keen appreciation for audit- and financial control-related matters. As a director
of Dr Pepper Snapple Group, Inc. (2008-present) and a director of Molson Coors Brewing Company (2005-2009),
has helped oversee the strategy and operations of other major multinational corporations.
Ralph W. Babb, As chairman and CEO of Comerica Incorporated and Comerica Bank (2002-present) and
through a long career in banking, has gained first-hand experience in managing large, complex institutions, as
well as insight into financial markets. As Audit Committee chair at the company (April 19, 2013-present), chief
financial officer of Comerica Incorporated and Comerica Bank (1995-2002), controller and later chief financial
46
officer of Mercantile Bancorporation (1978-1995), and auditor and later audit manager at the accounting firm of
Peat Marwick Mitchell & Co. (1971-1978), has gained extensive audit knowledge and experience in audit- and
financial control-related matters.
Robert E. Sanchez, As chairman and CEO (2013-present), president (2012-2014) and chief operating officer
(2012) of Ryder System, Inc., and as president of its Global Fleet Management Solutions business segment (2010-
2012), has gained first-hand experience in managing a large, multinational, transportation-related organization,
with responsibility for the organization's financial performance and significant capital investments. As executive
vice president and chief financial officer (2007-2010) and as senior vice president and chief information officer
(2003-2005) of Ryder System, Inc., has developed a keen appreciation for audit- and financial control-related
issues and gained first-hand experience with all technology-related functions of a large, multinational corporation
focused on transportation and logistics.
Ronald Kirk, As U.S. Trade Representative (2009-2013), has gained first-hand experience in managing a
complex organization that operates on an international scale and developed insight into issues bearing on global
economic activity, international trade policies and strategies and the workings of foreign governments. As Senior
Of Counsel of Gibson, Dunn & Crutcher LLP (2013-present), and as a partner of Vinson & Elkins, LLP (2005-
2009), has gained first-hand experience as an advisor to numerous multinational companies. As a director of
Brinker International, Inc. (1997-2009) and Dean Foods Company (1997-2009), has helped oversee the strategy
and operations of other large corporations.
Mark A. Blinn, As CEO and a director of Flowserve Corporation (2009-present), has gained first-hand
experience in managing a large, multinational corporation operating in global industrial markets, with ultimate
management responsibility for the organization's financial performance and significant capital and R&D
investments. As chief financial officer of Flowserve Corporation (2004-2009), chief financial officer of FedEx
Kinko's Office and Print Services Inc. (2003-2004) and vice president and controller of Centex Corporation
(2000-2002), has developed a keen appreciation for audit- and financial control-related matters.
Ms. Janet Clark, As executive vice president (2007-2013) and chief financial officer (2004-2013) of Marathon
Oil Corporation, has developed a keen appreciation for audit- and financial control-related matters. As a director
of Goldman Sachs BDC, Inc. (2015-present) and EOG Resources, Inc. (2014-present) and as a former director of
Exterran Holdings, Inc. (and its predecessor company, Universal Compression Holdings, Inc.) (2003-2011) and
Dell Inc. (2011-2013), has helped oversee the strategy and operations of other large multinational corporations,
including one with a focus on technology.
On June 16, 2016, the Registrant's Board of Directors elected Ms. Jean Hobby to the Board of Directors of the
Registrant effective July 20, 2016. Ms. Hobby held global and U.S. leadership positions both in administration
and in client businesses during her successful 32-year career at PricewaterhouseCoopers LLP. While at
PricewaterhouseCoopers, Ms. Hobby, 55, served as strategy officer from 2013 until retirement in 2015. Earlier
positions there included U.S. sector lead for the firm's multi-billion dollar Technology, Media and Telecom
practice from 2008 to 2013, and chief financial officer from 2005 to 2008. She currently serves on the board of
Greatbatch, Inc. Ms. Hobby earned a bachelor's degree in accounting from the University of Arkansas.
On January 19, 2017, the Registrant's Board of Directors elected Mr. Todd M. Bluedorn to the Board of
Directors of the Registrant effective March 1, 2017. Mr. Bluedorn is chairman of the board and chief executive
officer of Lennox International Inc., a global provider of climate control technology for the heating, air
conditioning and refrigeration markets. Before joining Lennox, Mr. Bluedorn, 53, held a number of senior
management positions at United Technologies Corporation, including president of three different businesses. Mr.
Bluedorn earned a master's in business administration from Harvard University and a bachelor's of science in
47
electrical engineering from The U.S. Military Academy at West Point, after which he served in the United States
Army as a combat engineer officer and Army Ranger. Mr. Bluedorn also is a director on the boards of Lennox
and Eaton Corporation, and is a trustee of Washington University in St. Louis.
48
317
Organizational Chart
49
Endnotes to HR
315
Texas Instruments Inc. Company Financials, MergentOnline, accessed March 2017.
316
“Texas Instruments Inc, Board of Directors,”Morningstar, http://insiders.morningstar.com/trading/board-of-
directors.action?t=TXN&region=usa&culture=en-US, accessed March 2017.
317
The Official Board. "Texas Instruments", https://www.theofficialboard.com/org-chart/texas-instruments,
accessed April 2017.!
50
Exhibit 4: Value Chain
Infrastructure
•! 92% of employees approve of Texas Instruments’ CEO, Rich Templeton.318 61% approve of Intel
Corporation’s CEO, Brian Krzanich.319 67% approve of Qualcomm’s CEO, Steve Mollenkopf.320 (+)
•! Revenues: TI: 13.370 M321, Intel: 59.387 M322, Qualcomm: 23.554 M323 (-)
•! International Presence: Approximately 87% of TI’s revenues come from abroad.324 Approximately 87%
of Qualcomm’s revenue comes from abroad325, and approximately 78 % of Intel’s revenue comes from
abroad.326 (+/=)
•! Market Share: TI has 3.7 % market share in the Semiconductor Industry327, Intel has 15.1%328, and
Qualcomm has 4.9%.329 (=)
•! Awards: In 2016, TI was placed on Euronext Vigeo, World 120 (120 most advanced companies in the
European, North American and Asia Pacific region), on Fortune’s “World Most Admired Companies”,
“WE 100 Corporations of the Year”.330 Intel received a perfect score of 100% on the 2016 Corporate
Equality Index.331 In 2016, Qualcomm won multiple awards in innovation, but was not recognized for
culture or sustainability. 332 (+)
Supporting Activities
•! Management Experience: CEO Rich Templeton has been at TI for 37 years333, Intel CEO Brian
Krzanich has been at Intel for 35 years334, CEO Steve Mollenkopf has been at Qualcomm for 23
years335 (+)
Finance
•! In 2016, TI’s net profit margin was 26.89%336, Intel’s was 17.37%337, and Qualcomm’s was 24.22%338.
(+)
•! In 2016, as a percentage of total revenue, TI spent 10.25%339 on R&D, Intel spent 21.45%340, and
Qualcomm spent 21.87%341.(-)
•! TI’s D/E is .34342, Intel’s is .38343, and Qualcomm’s is .37344. Between the three competitors, TI has the
lowest ratio and therefore a stronger position. (+)
Human Resources
•! TI has 29, 865 employees345, Qualcomm has approximately 30,500 employees346, and Intel has 106,000
employees347. (=/-)
•! TI’s Revenue per employee is $446, 458348, Intel’s is $198,521.58349, and Qualcomm’s is $774,384350.
(=)
•! In 2009, TI opened Kilby Labs to provide an environment for engineers to explore emerging
technologies.351 Intel collaborates with universities for research.352 Qualcomm focuses on its research
department to pursue new technologies353 (+)
•! Employee Reviews: TI has 3.9 rating stars, 82% would recommend to a friend.354 Intel has 3.6 stars and
72% would recommend to a friend.355 Qualcomm has 3.6 stars and 67% would recommend to a
friend356 (+)
Sales/Distribution
•! TI sells its products to about 100,00 customers, with more than 1/3 of revenue coming from customers
Primary Activities
outside its largest 100.357 Neither Intel nor Qualcomm quantified how many customers they may have.
(+)
•! Intel primarily sells to original equipment manufacturers and original design manufacturers358,
Qualcomm primarily sells to communications customers359, and Texas Instrument sells to industrial,
automotive, and personal electronics customers360. (+/=)
•! Intel came in 6th on Forbes’ most power brands361, TI has a misunderstood brand, and Qualcomm’s
brand is valued at 6.8 billion362 (-)
51
Manufacturing
•! Intel conducts most of its manufacturing in – house and provides foundry service factories.363
Qualcomm outsources foundry service and relies on third parties for manufacturing, testing, and
assembly.364 Texas Instruments owns manufacturing facilities, including fabrication, assembly and
testing, but relies on third parties for foundries.365 (=)
•! 60% of TI revenue is fulfilled from consignment inventory programs.366 Qualcomm relies on forecasts
of customer demand to place orders with suppliers.367 Intel also uses estimates and advance non-
binding commitments from customers368(+)
•! Texas Instruments has 15 manufacturing sites in 9 countries369, Intel has 10 manufacturing sites in 9
countries370, Qualcomm does not have its own manufacturing facilities.371 (+)
Technology
•! TI streamlines supply chain through global IT system and SAP enterprise resource planning, 372 Intel
was placed 4th on Gartner’s list of “Top 25 Supply Chains and is using Real Sense camera technology
in its supply chain,373 Qualcomm has adopted the EICC Code of Conduct in their operations374 (+)
•! Texas Instruments has 49,182 patents,375 Intel has 101, 991 patents376, and Qualcomm has 25,482377
patents. (=)
•! Intel will be releasing new 7nm process technology378, Qualcomm is working towards LTE Advanced,
and LTE Advanced Pro379, and TI is driving innovation in automotive processors380. (=)
52
Endnotes Value Chain
318
Glassdoor, “Working at Texas Instruments.” Glassdoor.com, https://www.glassdoor.com/Reviews/Texas-Instruments-Reviews-
E651.htm, accessed April 9, 2017.
319
Glassdoor, “Working at Intel Corporation.” Glassdoor.com, https://www.glassdoor.com/Reviews/Intel-Corporation-Reviews-
E1519.htm, accessed April 9, 2017.
320
Glassdoor, “Working at Qualcomm.” Glassdoor.com, https://www.glassdoor.com/Reviews/Qualcomm-Reviews-E640.htm,
accessed April 9, 2017.
321
Texas Instruments, Inc., February 23, 2017 Form 10 –K, accessed April 2017.
322
Intel Corp., February 17, 2017 Form 10 – K, accessed April 2017.
323323
Qualcomm Inc., November 2, 2016 Form 10 –K, accessed April 2017.
324
Company Financials for Texas Instruments, Inc., via Bloomberg, accessed April 2017.
325
Company Financials for Qualcomm, Inc., via Bloomberg, accessed April 2017.
326
Company Financials for Intel, Corp., via Bloomberg, accessed April 2017.
327
Global Semiconductor Revenue., via Bloomberg, accessed April 2017.
328
Ibid.
329
Ibid.
330
“Corporate Citizenship – Awards 2012 - 2016”, Texas Instruments,
http://www.ti.com/corp/docs/company/awardfactsheet.shtml?DCMP=Citizenship&HQS=awards, accessed April 2017.
331
“Jobs at Intel: Awards and Recognition”, Intel Corporation, http://www.intel.com/content/www/us/en/jobs/awards-and-
recognition.html, accessed April 2017.
332
“Awards”, Qualcomm, https://www.qualcomm.com/company/about/awards, accessed April 2017.
333
“Leadership, Texas Instruments, http://www.ti.com/corp/docs/investor_relations/leadership.html#templeton_exc, accessed April
2017.
334
“Brian M. Krzanich”, Newsroom Intel, https://newsroom.intel.com/biography/brian-m-krzanich/, accessed April 2017.
335
“Qualcomm Inc.”, Bloomberg,
http://www.bloomberg.com/research/stocks/people/person.asp?personId=45242044&privcapId=33493, accessed April 2017.
336
Texas Instruments, Inc. Financial Ratios, Mergent Online, accessed April 2017.
337
Intel, Corp Financial Ratios, Mergent Online, accessed April 2017.
338
Qualcomm, Inc. Financial Ratios Mergent Online, accessed April 2017.
339
Op. Cit., “Texas Instruments, Inc. Financial Ratios”.
340
Op.Cit., “Intel, Corp Financial Ratios”.
341
Op. Cit., “Qualcomm, Inc. Financial Ratios”.
342
343
Op.Cit., “Intel, Corp Financial Ratios”.
344
345
Op. Cit., “Texas Instruments Form 10 – K”, p. 7.
346
Qualcomm Inc., November 2, 2016 Form 10 – K, p. 16,
http://files.shareholder.com/downloads/QCOM/4333260977x0x915400/CD71F5A8-BEAA-4EEE-B385-
2CD75B48B9D3/2016_Annual_Report_Form_10-K.pdf, accessed April 2017
347
Intel Corp., February 17, 2017 Form 10 – K, p. 10,
https://s21.q4cdn.com/600692695/files/doc_financials/2016/annual/Intel_2016_Annual_Report.pdf, accessed April 2017.
348
349
Op.Cit., “Intel Corp, Financial Ratios”.
350
351
“Company History”, Texas Instruments, http://www.ti.com/corp/docs/company/history.html, accessed April 2017.
352
“Research”, Intel, http://www.intel.com/content/www/us/en/research/intel-research.html, accessed April 2017.
353
“Research”, Qualcomm, https://www.qualcomm.com/invention/research, accessed April 2017.
354
Glassdoor. “Texas Instruments Employer Reviews”, April 2017, accessed April 2017.
355
Glassdoor. “Intel Corporation Employer Reviews”, April 2017, accessed April 2017.
356
Glassdoor. “Qualcomm Employer Reviews”, April 2017, accessed April 2017.
357
Op. Cit., “Texas Instruments, Inc. Form 10 – K”, p. 13.
358
Op. Cit., “Intel Corporation Form 10 – K”, p. 27.
359
Op.Cit., “Qualcomm, Inc. Form 10 – K”, p. 15.
360
Op.Cit., “Texas Instruments, Inc. Form 10 – K”, p. 15.
361
“The World’s Most Powerful Brands”, Forbes, https://www.forbes.com/pictures/fell45elff/no-6-intel/#755c1e0b3e39, accessed
April 2017
53
362
“The World’s Most Valuable Telecom Brands Revealed,” press release,
http://brandfinance.com/images/upload/brand_finance_telecoms_500_website.pdf, accessed April 2017
363
Op. Cit., “Intel Corporation Form 10 – K”, p. 17
364
Op.Cit., “Qualcomm, Inc. Form 10 – K”, p. 21
365
Op. Cit., “Texas Instruments, Inc. Form 10 – K”, p. 24
366
Ibid.
367
Op.Cit., “Qualcomm, Inc. Form 10 – K”, p. 12
368
369
“Manufacturing”, Texas Instruments, http://www.ti.com/corp/docs/company/manufacturing.html, accessed April 2017.
370
“Global Manufacturing at Intel”, Intel Corporation, http://www.intel.com/content/www/us/en/architecture-and-technology/global-
manufacturing.html, accessed April 2017.
371
“Qualcomm Reference Designs”, Qualcomm Inc., https://qrd.qualcomm.com/, accessed April 2017.
372
James Cooke. “TI’s FABulous Supply Chain,” Supply Chain Quarterly, April 2008,
http://www.supplychainquarterly.com/topics/Global/scq200801texas/, accessed April 2017
373
Susan Lacefield. “At Intel, supply chain make sure it’s ‘in the room where it happens’,” August 2016,
http://www.supplychainquarterly.com/topics/Strategy/20161007-at-intel-supply-chain-makes-sure-its-in-the-room-where-it-happens/,
accessed April 2017.
374
“Supply – Chain Management,” Qualcomm Inc., https://www.qualcomm.com/company/sustainability/priorities/sustainable-
product-design/supply-chain-management, accessed April 2017.
375
US Patent and Trade Office. “USPO Patent Full – Text and Image Database”, http://patft.uspto.gov/netacgi/nph-
Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-
bool.html&r=0&f=S&l=50&TERM1=Qualcomm&FIELD1=&co1=AND&TERM2=&FIELD2=&d=PTXT accessed, April 2017.
376
Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=0&f=S&l=50&TERM1=Intel
&FIELD1=&co1=AND&TERM2=&FIELD2=&d=PTXT accessed, April 2017
377
Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=0&f=S&l=50&TERM1=Texas
Instruments&FIELD1=&co1=AND&TERM2=&FIELD2=&d=PTXT accessed, April 2017
378
379
Op.Cit., “Qualcomm, Inc. Form 10 – K”, p.8
380
Op. Cit., “Texas Instruments, Inc. Form 10 – K”, p. 12
54
Exhibit 5: 4Ps
Product Placement
•! Amplifiers •! Manufacturing Locations:

•! Audio o! United States, Mexico,
•! Clock & Timing Scotland, Germany, China,
•! Data Converters Malaysia, Philippines, Taiwan,
•! Die & Wafer Services Japan1
•! DLP Products •! Sales Locations:
•! Interface o! Brazil, Canada, Mexico, United
•! Isolation States, Australia, China, India,
Malaysia, Philippines,
•! Logic
Singapore, South Korea,
•! Motor Drivers
Taiwan, Thailand, Austria,
•! Power Management Belgium, Denmark, Finland,
•! Embedded Processors France, Germany, Israel, Italy,
•! RF & Microwave Norway, Poland, Russia, Spain,
•! Sensing Products Sweden. Switzerland, Turkey,
•! Storage Products United Kingdom, Japan2
•! Switches & Multiplexers
•! Wireless Connectivity
Price Promotion
•! Semiconductors can range from $.04 to •! 60% of revenue was generated from
$200 per unit3 sales through distribution channels7
•! Price changes depending on •! Market products through direct sales,
semiconductor’s capabilities distributors, and online8
•! As quantity increases, price decreases •! Distributors have the power to promote
•! Profit margins vary over time as competing products
customer demand, shipment volume, •! Expense advertising and other
and obsolescence of inventory change4 promotional costs as incurred9
•! Semiconductor prices and •! Spent $44 million in 2016 and $46
manufacturing costs tend to decline million in 201510
over time product life cycle matures
•! Reduced profit margins and lost
business if unable to match the price or
cost efficiencies of competitors5
•! Orders can be subject to price change
depending on industry conditions6
55
Endnotes for 4Ps
1
Texas Instruments, http://careers.ti.com/locations/, accessed April 2017.
2
Ibid.
3
Texas Instruments, http://www.ti.com, accessed April 2017.
4
Texas Instruments Inc., December 31, 2016 Form 10-K, p. 12.
5
6
7
8
Ibid.
9
10
Ibid.
56
Exhibit 6: Core Competence Map
57
Exhibit 7: BCG Matrix
High
Industry:
Growth Rate
3.1%
GDP 3%
Low
100% 85.71% 23.81% 17.86%
Relative Market Share1
58
59
Endnotes for BCG
1
Source: Semiconductor and Circuit Manufacturing in the US, IBISWorld, accessed March 2017.
60
Exhibit 9: Competitive Map
61
Threat of New Entrants (L)
Supply Side Economies of Scale (H): Well established companies with key customers392. Once investment
in FABs is made, low cost to increase output393
Demand Side Benefits of Scale (L): Low response to brand identity394
Customer Switching Costs (M): Buyers have established contracts with reputations at stake395. Customers
are unwilling to risk quality of own products396
Capital Requirements (H): High level of investment required for production facilities397, up to 10 billion
required from 1 billion in 2001398, need highly skilled employees399, need for large R&D capabilities
Incumbency (M): There are a few global players400, high concentration in the industry401, Intel Market
Share: 14.7%, Samsung Market Share: 11.5%402
Government Policy (M): More concern over environmental safety and health403, pro-growth support from
regulatory bodies including research funding404
Threat of Suppliers (M) Threat of Rivalry (H) Threat of Buyers (M)
Switching Costs (H): Risk of Competitors (H): Limited number of Consumers (M): High
sourcing raw materials of competitors, but equal in power415, number of customers428,
inadequate quality405, interruptions increasing M&A contributes to buyers purchase in large
in the supply chain406 consolidation.416 High competition volumes429
Integration into Industry (L): with low cost manufacturers in Product Differentiation
Little likelihood of vertical Asia.417 Herfindahl index is 2340418 (H): High degree of product
407
integration , some semiconductor Differentiation (H): Low differentiation430, potential
manufacturers may fabricate chips differentiation among to establish monopoly
408 419
but few options semiconductors , sub – industry position through
Concentration (M): Medium may have stronger differentiation in differentiation 431, some
420
concentration: many FAB’s and various parameters products are completely
manufacturers of semiconductor Industry Growth (L): 359 billion in commoditized and
materials409, Not many companies global revenues for 2016.421 665 undifferentiated432
422
in manufacturing equipment for billion in revenues by 2021. Vertical Integration (M):
FABs or ultrapure semiconductor Growth Rate 1-3% between 2016 and Some large companies are
wafers410, many suppliers have a 2017.423 Mature industry.424 vertically integrated433
semiconductor firm as their largest Exit Barriers (M): Investment in Price Sensitivity (M): For
411
client FABs is made and exit cost is high general purpose
Supplier Dependency (M): High due to sunk costs of research425 technologies, buyers will
dependency, suppliers must cater to Price Competition (M): Switching seek low cost options434
ever – evolving demands of costs vary, according to type of Industry Product (H):
semiconductor clients412 semiconductor in question426. Electronic industry is very
Differentiation of Products (M): Engineers “learn” programming dependent on
Processes of design are unique and based on manufacturer style427 semiconductors for product
413
not all companies offer them , Life Span (H): Semiconductors have quality435
there are no substitutes for a short life span averaging 3-5 years
414
silicon
Substitutes (L) Complements (M)
Direct (L): In almost all end – markets, there are Segment specific products are sensitive to end
no significant alternatives to semiconductors436, product demand such as
437
counterfeit of high quality components computer hardware439 (M)
Indirect (L): Long term, new technologies may Demand increases with the development of new
offer devices with superior capabilities to consumer electronic
semiconductors438 products440 (M)
62
Short life of electronic products affects relevancy of
semiconductors441 (M)
Exhibit 10: Semiconductor Industry 6 Forces
63
Endnotes Exhibit 10
392
Source: Semiconductors in the United States, Business Source Premier, accessed March 2017.
393
Op. Cit., “Semiconductors in the United States”, p. 19.
394
395
396
Ibid.
397
398
Source: Semiconductors and Semiconductor Equipment, S&P Capital IQ, accessed March 2017.
399
Ibid.
400
Ibid.
401
Ibid.
402
Op. Cit., “Semiconductors and Circuit Manufacturing in the US”, p. 30.
403
404
Ibid.
405
406
Ibid.
407
Ibid.
408
bid.
409
Ibid.
410
Ibid.
411
Op. Cit., “Semiconductors and Semiconductor Equipment”, p. 45.
412
Ibid.
413
414
Ibid.
415
Ibid., p. 19.
416
Ibid.
417
Op. Cit., Semiconductors and Semiconductor equipment
418
Ibid.
419
Ibid.
420
421
Source: Global Semiconductor and Electronic Parts, IBISWorld, accessed March 2017.
422
Ibid.
423
424
Op. Cit, “Semiconductor and Semiconductor Equipment.”
425
426
Ibid.
427
Ibid.
428
429
Source: Semiconductors and Semiconductor Equipment, S&P Capital Advantage, accessed March 2017.
430
431
432
Ibid.
433
Ibid., p. 14.
434
435
436
Ibid., p. 18.
437
Ibid.
438
Ibid.
64
439
440
441
Ibid., p. 20.
65
Exhibit 11: Target Markets
US Aging Demographic Freight Manufacturers and Dependents
Geographic: Geographic:
•! United States ●! United States
•! National Health Expenditure grew ●! Freight Trucking Industry market growth is currently -
5.8% in 2015 (to $3.2 trillion)442 2.1% and is predicted to grow 1.0% 2017-2022446
•! NHE predicted to grow 5.6% ●! Dependent businesses on the JIT delivery system have
annually 2016-2025443 increased road-freight demand447
Demographic Demographic
•! US has an growing age segment of ●! Drivers: Average age of a freight-driver is 55 years
70-79 expected to grow at a rate of old448. Driver shortages hurts industry growth449, and
73.5% by 2030444 as government regulation decreases work hours of
Psychographic drivers less freight can be shipped450
•! Medical patients seeking accurate Psychographic
diagnosis and competence, ranked as ●! Truck Manufacturers seeking opportunity to
the second most important factor in a decrease cost and revolutionize industry
doctor445 ●! Companies looking for quicker and more efficient
Product related delivery of goods
•! Those who are in need of implantable Product related
medical devices (such as the heart ●! Automobile engine and parts manufacturers451
pacemaker) ●! Volatility of crude oil price makes it difficult for
Freight companies to estimate cost of transportation,
price of oil is not looking to stabilize.452
Car Manufacturers Global Consumer Electronic Manufacturers
Geographic: Geographic:
●! United States ●! Consumer Electronic Manufacturing is a highly
●! Sales volume expected to decrease globalized industry459
1.5-2% in 2017 and plateau in ●! North Asia, Europe, and North America are the top
2018.453 three regional locations for manufacturers
Demographic ●! Location of Electronic Manufacturers:
●! Commercial Car Manufacturers in ○! North Asia: 58.9%
the US, specifically company ○! Europe: 22.1%
leadership. ○! North America: 10.6%460
●! Defense Automobiles and Devices ●! Manufacturer location is dependent upon cost of
manufacturing companies, operations within the country. Factors that affect
specifically those contracted with the operation cost are cost of labor, government
US Federal government454 regulations, and proximity to complimentary
Psychographic industries461
●! US car manufacturers looking to Demographic
compete with Asian-Pacific region ●! Manufacturers rely on young consumers to purchase
manufacturers as competition products, as they tend to spend more on consumer
increases, and consumers look for electronics and tend to form new households that are
cheaper and more high-tech option455 in need of new appliances and electronic products462
Product related Psychographic
●! Decreasing unemployment rates and ●! Product differentiation among consumers is
low borrowing costs increase increasingly important and depends on smart features
consumer base456 and design, the ability of manufacturers to incorporate
these features help make firms competitive in the
66
Endnotes Exhibit 11
●! Lower gasoline cost improves car market463
purchases457
●! Increasing federal funding for
defense manufacturing458
442
Center for Medicare & Medicaid Services, “NHE Fact Sheet,” https://www.cms.gov/research-statistics-data-and-systems/statistics-
trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html, accessed April 2017.
443
Ibid.
444
Source:(The(United(States(of(America(in(2030:(The(Future(Demographic,(via(Euromonitor(International,(accessed(March(2017.((
445
The Associated Press-NORC center for Public Affairs and Research, “Finding Quality Doctors: How Americans Evaluate Provider
Quality in the United States: Research Highlights,” http://www.apnorc.org/projects/Pages/HTML%20Reports/finding-quality-
doctors.aspx, accessed April 2017.
446
Source: Truck and Bus Manufacturering in 2017, IBISWorld, accessed April 2017.
447
448
Source: Long-Distance Freight Trucking in the US, IBISWorld, accessed March 2017.
449
Ibid.
450
Ibid.
451
Ibid.
452
Ibid.
453
Source: Standard & Poor’s NetAdvantage, accessed March 2017.
454
Source: “Lithium Battery Manufacturing,” IBISWorld, accessed March 2017.
455
Source: Standard & Poor’s NetAdvantage.
456
Ibid.
457
Ibid.
458
Source: “Lithium Battery Manufacturing.”
459
460
461
Ibid.
462
Ibid.
463
Ibid.
67
Exhibit 12: TI Accounting Statements
68
69
70
71
72
Exhibit 13: Skyworks Financial Statements
73
74
75
76
77
78
79
80
81
82
83
Exhibit 14: Financial Ratios
84
85
Threat of New Entrants (L)
Government Policies (H): Government regulation is increasing464, thus medical device pricing is directly affected.
Political pressure on government programs combined with increasing healthcare cost will pressure customers to reduce
spending (limiting profit and revenue growth)465. A 2.3% medical device tax by the ACA, effective January 1, 2013;
however, deductibility after tax limited negative effects. 466
Product Differentiation(M): Dependent on brand awareness and niche labor skills467
Cost Advantages Independent of Scale(H): Most goods in the industry are manufactured under patents, and
technological know-how and intellectual property. There is a high-level of technical knowledge for manufacturing.468
Switching costs(L): brand of device does not affect purchaser; however, reliability of device is vital.469
Capital requirements(H): R&D cost is a significant cost for companies, most of their investments have little return as
constant innovation is demanded (cost of R&D is always high)470.
Unequal access to distribution channels(M): Medical supplies wholesalers have historically distributed goods to
hospitals, clinics, and practitioners; however, healthcare providers are starting to purchase directly from
manufacturers.471
Barriers to Entry (H): Economic regulation (Federal Drug Administration) and legal obstacles prevent entering.472
Threat of Suppliers (L) Threat of Rivalry (H) Threat of Buyers (M)
Number and Concentration of Supply-Side Economies of Scale (H): Number of Buyers (H):
Suppliers (H): Low concentration, there variable cost of production and selling Numerous, include individual
are 1,847 businesses in the Electrical prices decrease with large manufacturing hospitals and Specialist
Equipment Manufacturing Industry.473 facilities.481 Doctors in the US and
Suppliers Products (M): Uses both Number of Competitors (H): 871 Medical Supplies
electrical equipment and components as businesses in 2016.482 Wholesalers.488
well as specialized metal, plastic and Cost of Products (H): Increasing, Cost of Switching (H): If the
glass products. 474 especially as excise tax on goods increases. accuracy of device is in
483
Product Differentiation(M): question, cost of switching is
Dependent upon quality of product and Exit Barriers (H): Cost of R&D is high.489
brand name.475 continuous and large.484 Cost of Product to
Levels of Competition between Diversity of Rivals (H): Key players in Buyer(M) : Device price is
Suppliers (M): Medium and is the segmented industry offers diverse pressured to reduce to keep
476
increasing. product line of medical devices (can range sales up.490
Forward Integration Possibility (L): from restorative therapies to Profit to Buyers (H):
485
Low, as medical device equipment pacemakers) Industry Revenue for
require large amount of expertise.477 Major Companies: Top three medical Wholesaling is $187.5
Industry Relation with the Supplying device companies: Medtronic, Johnson & billion.491
Group (M): Provides basic electric Johnson, and Siemens. Buyers ability to Reverse
components for machines.478 Concentration(L): Top 15 companies Vertical Integration (L):
486
Outsourcing Manufacturing (H): control 43.5% of market. Difficult to reproduce
increased demand for low-cost Pricing Power (H): Large companies products without a significant
487
production of components leads to control price, and therefore margins. amount of capital.492
outsourcing manufacturing plants.479 Product Differentiation (L): Market Product Differentiation
Liability to Buyer (H): component experiencing high commoditization. (M): purchases of commodity
manufacturers liable for defects in final goods are dictated by long-
product.480 term supplier-buyer
contracts.493
Power of Complements (M) Threat of Substitutes (L)
86
Direct(M): Increased government spending on Direct Substitutes (L): Refusal of Healthcare service
healthcare.494 (11% of Americans are uninsured)497
Indirect(H): Expected population of ages 70-79 expected Indirect Substitutes (L): Increased overall health of
to increase by 73.5% by 2030495, population that depends aging population (unlikely).498
heavily on industry.496
Exhibit 15: Medical Devices 6 Forces
87
Endnotes Exhibit 15
464464
Source: Medical Supplies Wholesaling in the US Industry Report, IBISWorld, accessed March 2017.
465
Ibid.
466
Source: Standard and Poor’s Net Advantage, accessed March 2017.
467
Source: Medical Device Manufacturing in the US Industry Report, IBISWorld, accessed March 2017.
468
Ibid.
469
Ibid.
470
Ibid.
471
Ibid.
472
Source: Standard & Poor’s NetAdvantage, accessed April 2017.
473
Source: Electrical Equipment Manufacturing in the US Industry Report, IBISWorld, accessed March2017.
474
Source: Medical Device Manufacturing in the US Industry Report.
475
Ibid.
476
Ibid.
477
Source: Medical Device Manufacturing.
478
Ibid.
479
Source: Standard and Poor’s NetAdvantage.
480
Ibid.
481
Ibid.
482
Ibid.
483
Ibid.
484
Ibid.
485
Ibid.
486
Ibid.
487
Ibid.
488
Source: Medical Device Manufacturing in the US.
489
Ibid.
490
Ibid.
491
Source: Medical Supplies Wholesaling in the US Industry Report, IBISWorld, accessed March 2017.
492
493
494
495
Source: The United States of America in 2030: The Future Demographic, via Euromonitor International, accessed
March 2017.
496
497
Gallup, Inc., “U.S. Uninsured Rate at 11.0% Lowest in Eight-Year Trend,”
http://www.gallup.com/poll/190484/uninsured-rate-lowest-eight-year-trend.aspx, accessed March 2017.
498
88
Exhibit 16: Self-Automated Road Freight 6 Forces
Threat of Entry (H)

Incumbency Advantage (L): Brand reputation and experience Demand Side Benefits of Scale (M): 90% of players are
499
retains certain customers . independent owner-operators504, therefore purchases of
Capital Requirements (L): Cheap to enter as a freight hauler, freight services are not secured through brand power.
loans readily available to purchase necessary equipment for sole Switching Costs (L): Those in need of freight services
500
proprietorship . Fixed costs (wages, maintenance and fuel) are rarely sign long-term contracts505, keeping ability to rotate
501
high and unchanging . Debt burdens on drivers caused by between trucking fleets.
502
business loans to purchase truck suppress employee population Government Regulation (M): Increasing limits on number
Supply Side Benefits of Scale (L): Larger companies establish of hours for drivers apply downward pressure to revenues506.
relationships with large customers by matching needs for Regulation on fuel efficiency and emissions also large issues
shipment volume, and offering sophisticated logistics services . long term507
503
Threat of Buyers (L) Threat of Buyers (H) Threat of Suppliers (M)

Concentration (L): Wide range of Major Competition (H): Industry Segmentation (M):
companies, large and small, needs High fragmentation, no company has 32% of demand comes from retail companies,
508
freight hauling services more than 3% of overall market 62% from manufacturing, and 5% from
Switching Costs (L): Larger share . 90% of the businesses are sole other525
515
companies leverage large purchases to proprietorships516. Backwards Integration (H): Certain

negotiate prices between Price Competition (H): Small retailers are capable of backwards integration,
509
competitors operators compete with multinationals acquiring personal truck fleets526.
Standardization of Products (H): on price and force margins down517 Forward Integration (L): Freight companies
Because all trucking services are Competitive nature of operators forces are unlikely to forward integrate527
nearly identical, long term contracts bidding wars518 Concentration (L):
510
are rarely signed by customers Product Differentiation (L): Similar No single freight company holds more than
Differentiation of Markets (L): services offered regardless of 3% of market share528
519
All trade has needs to move large company Industry Growth (M): Workforce Issues (H):
volumes of goods quickly to precise Profit margin expected to fall from Driver shortages since 2005529, and average
511 520
location . ¼ of global imports enter 7.5% to 6% by 2021 age is 55530. 35% of industry cost come from
at western ports, which then must be 2.1% revenue growth to $202 billion driver wages and benefits531
transferred elsewhere512. Retail through 2021521. Growth in ecommerce Switching Costs: Large fleets secure lower
industry shifted to “Just In Time” increases industry revenue potential522 fixed costs through contracted, bulk fuel
inventory system, increasing shipment Exit Barriers (L): Trucking fleet purchases532
frequency513 assets are easily transferable523. Certain Price Volatility: Spikes in fuel prices drive
Integration Ability (H): Large retail high-level logistics companies have up cost of freight services533
companies can purchase their own higher exit costs524
514
truck fleet for shipping needs
Complements (M) Substitutes (H)
Increase in economy production (total trade value, Direct (L): Air, Marine, and Rail Shipping
household disposable income, and industrial production Indirect (L): Increase in drone technology could change
rates) drives industry demand534. The more freight trucks outlook of road freight. But, nothing competes with
are on the road, more work and demand for service geographical precision of road freight536
technicians, vehicle manufacturers, and after-market
parts producers535
89
Endnotes Exhibit 16
499
Source: Road Freight in the United States, Marketline Industry Profile, accessed March 2017
3
Ibid
501
Ibid
502
Ibid
503
Ibid
504
505
Op. Cit., Road Freight in the United States
506
Op. Cit., Long Distance Freight Trucking
507
Ibid
508
Op. Cit., Road Freight in the United States
509
Ibid
510
Ibid
511
Ibid
512
Op. Cit., Long Distance Freight Trucking
513
Ibid
514
Ibid
515
Source: North American Trucking Industry Primer, Bloomberg Intelligence, accessed March 2017
516
Op. Cit., Long Distance Freight
517
Ibid
518
Ibid
519
Op. Cit., Road Freight in the US
520
521
ibid
522
Op. Cit. Road Freight in the US
523
Ibid
524
Ibid
525
Ibid
526
Ibid
527
Ibid
528
529
Ibid
530
Ibid
531
Op. Cit., North American Trucking
532
Op. Cit., Road Freight
533
534
Ibid
535
Op. Cit., Road Freight
536
Ibid
90
Exhibit 17: Lithium-Ion Battery 6 Forces
Threat of New Entrants

Economies of Scale: large companies are more profitable because they have lower per-unit production costs
due to their size537
Product Differentiation: high demand for energy-efficient, safe, and low-cost batteries538
Capital Requirements: high research and development costs to remain current on changing technology.
Supply costs can be high for smaller firms539
Government Policy: heavy regulation regarding environmental law and quality standards. Companies must
meet EPA requirements, regulations like the Clean Air Act, and OSHA protocol or face significant fines540
Incumbent Advantage: produce at reduced costs and they have increased negotiating power when
purchasing raw materials. Further, access to innovative labor and machinery is highly advantageous541
Threat of Suppliers Threat of Rivalry Threat of Buyers
Concentration: there are Concentration: low concentration with Consumers: domestic original
several suppliers offering industry’s four largest companies equipment manufacturers generate
substitute resources for raw generating 13.6% of industry 56.3% of industry revenue553 and
materials542 revenue547; many companies specialize buyer market is expanding554
Environmental: volatility in in producing batteries for specific Backward Vertical Integration:
the mining industry leads to applications548 buyers can backward integrate
increase in costs through Industry Growth: driven by high evidenced by Tesla purchasing
2022543 demand for battery management Panasonic555 further as price of
549
Supplier Power: heavy systems in electric vehicles ; industry lithium batteries falls, operators
reliance by buyers on is set to grow at 10.5% through 2021550 can better compete with other
suppliers as they provide the Product Differentiation: Lithium ion forms of batteries556
main components of buyers’ battery technology is being increasingly Industry Product: automotive
end products544 used in new applications like auto, industry highly reliant on lithium
551
Relative Costs: purchase defense and energy sectors ion batteries for use in electric and
costs represent 40.7% of Exit Barriers: investments in R&D for hybrid vehicles; generate 11.3%
industry revenue but price of specialized products for specific end of industry revenue557
lithium is decreasing products creates high sunk costs552 Price Sensitivity: as price of
545
improving margins lithium ion batteries has decreased
Switching Costs: heavy over the past five years, demand
reliance on quality inputs due has increased558
to potential for lithium ion
batteries to combust546
Power of Complements Threat of Substitutes
559
New car sales, especially hybrid and electric vehicles Direct: alternative energy storage
Federal funding for defense automobiles and devices560 systems561, batteries composed of
alternative compounds562
91
Endnotes Exhibit 17
537
Source: “Battery Manufacturing in the US,” IBISWorld, accessed March 2017
538
Source: “Battery Management System Market by Battery Type, Component, Topology, Application, and Geography –
Global Trend and Forecast to 2022,” Mark and Markets, accessed March 2017.
539
Op. Cit., “Battery Manufacturing in the US.”
540
Ibid.
541
Ibid.
542
Source: “Metal Wholesaling.” IBISWorld, accessed March 2017.
543
544
Source: Texas Instruments Inc, Form 10-k. Mergent. February 23, 2017, accessed March, 2017, page 10.
545
Source: “Lithium Battery Manufacturing,” IBISWorld, accessed March 2017.
546
Op. Cit., “Lithium Battery Manufacturing”
547
548
Op Cit., “Lithium Battery Manufacturing”
549
Op. Cit., “Battery Management System Market by Battery Type, Component, Topology, Application, and Geography
– Global Trend and Forecast to 2022.”
550
551
552
553
554
Op. Cit., “Lithium Battery Manufacturing.”
555
“Tesla’s Gigafactory Supply Chain Vertical Integration,” Supply Chain 247,
http://www.supplychain247.com/article/telsas_gigafactory_supply_chain_vertical_integration, accessed March 2017.
556
557
558
559
560
561
562
92
Exhibit'18:'Acquisition'
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
Exhibit 19: Core Competence Strategy
Existing Business Segments New Business Segments
Extension Strategies Business Creation
1.! Create a new embedded processor for 1.! Partner with the University of Texas to
implantable healthcare patient-monitoring create an eco-friendly battery powered by
devices glass electrolytes
a.! Build upon existing external healthcare a.! Creation of this battery eliminates
devices to allow for implantable risks of explosions and fires,
functions specifically within high-operating
b.! Improve wireless communication devices
between device and information b.! Target growing organizations
recipients operating within the eco-friendly
2.! Add a personal assistant and internet automotive manufacturing industry
capacity feature to calculators such as the such as Tesla
TI Inspire 2.! Development of a new Quantum
New Competencies
a.! Allow for users to directly ask the Computer

calculator to search its database and the a.! Re-introduce Texas Instruments into
internet for guidance in solving logical the computer manufacturing industry
problems with voice response and partner with leading science
capabilities organizations such as JPL to produce a
b.! Gain a new core competency by Quantum Computer
becoming the leading calculator supplier b.! Given large capital, labor, and R&D
for physicists and people working investments, creating a Quantum
within similar fields Computer is within Texas Instruments’
3.! Integrate hologram and touchscreen reach
features to TI DLP! projector technology 3.! Partner with NASA to invest in Space
a.! Allow projector to make choice Travel technologies such as spaceships
selections by pressing the projected and satellites
image a.! Gain market share in a new industry
b.! Target consumers in existing education, and compete with TI’s largest rival,
corporate, and home theater markets as Intel, by gaining a core advantage in
well as organizations dedicated to space travel.
supporting technological innovations
Efficiency Strategies Business Segmentation
109
1.! Acquire licensing rights to Stanford 1.! Engineer a self-driving truck utilizing
University’s manufacturing process for existing competency in sensors,
reusable gallium arsenide chips instead of embedded processors, and analog
utilizing silicone as the primary material devices
a.! Gallium Arsenide allows electrons to b.! Given increase in trucking industry
run through crystalline structure, revenues, TI can inflate dwindling
calling for faster transmission of labor supply to road freight trucking
information throughout the organizations.
Existing Competencies
semiconductor chip. 2.! Produce a touch screen addition feature

b.! Obtaining Stanford’s manufacturing adaptable for consumer electronics such
rights lowers production costs, which as computers and televisions
enhance efficacy of product a.! Build upon TI’s current touch screen
fabrication converters used in high-function
2.! Enhance efficiency of Internet of Things systems and produce within the
(IoT) technologies consumer electronics industry.
a.! Generate a data conversion system b.! Reduce production and supply costs to
which allows for data to be transferred remain within customer discretionary
through connectivity devices such as spending possibilities
WiFi, Bluetooth, and Ethernet 3.! Partner with Boeing Aicraft to create a
increasing efficiency of data transfers plane motor
throughout the IoT system a.! Expand on existing automotive motors
to adapt for aircraft vehicles
110
Exhibit 20: CASE Analysis
SO WO
1.! Use strength in embedded and analog 3.! Increase global semiconductor market
technology to create compatible share by taken advantage of growing LTE
technology for self-driving technology market. (W1, O5)
(S3, O2, O4) 4.! Begin targeting companies in wearable
2.! Use strong R&D to pursue new technology, AI, etc. to increase customer
technology in IOT industry (S4, S11, O5) range. (W9, O6)
ST WT
1.! Develop end consumer products to 3.! Revolutionize semiconductor industry and
differentiate from heavy competitors (S5, become market leader through new
S8, T1,2) resource developments (W1, T1, T2)
2.! Develop employee programs like those in 4.! Reduce threat from small competitors
newer tech companies (ex. Alphabet), to through acquisitions (T3, W1)
modernize and attract recent graduates
(S16, S17, S18, T8)
111
Exhibit'21:'Competitive'Industry'Analysis'
1)! Degree of Technology in the industry

High Level of Technology 1 2 3 4 5 6 7 8 9 10 Low Level of Technology
Hard Data: In order to be a competitive firm with the Semiconductor Industry, a firm must invest heavily in
Research and Development563. Highly skilled employees are vital to develop a product that offers superior
technology, which is a product differentiator in the industry564. Texas Instruments creates the analog and
embedded processing chips that are necessary to function an electronic device; the creation of this technology is
a requirement to be in the Semiconductor Industry. As the electronic industry is incredibly reliant on
semiconductors for product quality565, the level of technology change is high566. Technological advancements
continually force manufacturers of semiconductors to adapt to new technology (such as reduction in the size of
transistors, new processes in depositing material onto and removing material from the wafer, and new wiring
and insulating materials)567. The manufacturing of a semiconductor requires technological expertise and
manufacturing capacity. TI (239) is leading the innovation within automotive processor technology.
Assessment of Company v. Industry: Overall, industry revenues depend on consumer demand for electronic
devices. As smart grid technology and smart vehicle demand increase568, revenues project to substantial growth.
With the average of 20% of revenue spent on R&D569 firms are actively seeking to improve technology to
remain competitive.
2)! Rate of innovation, product, services, or business model innovation in the industry
Rapid Innovation 1 2 3 4 5 6 7 8 9 10 Almost No Innovation
Hard Data: Texas Instruments offers more than 100,000 analog and embedded processor products, and has more
than 41,000 patents within the United States570. TI is considered one of the most advanced companies in North
America, Europe, and Asia as it was placed on Euronext Vigeo’s World 120 (list of innovative companies) in
2016571.
Assessment of Company vs. Industry: Companies within the industry depend on trade secrets, licensing and
confidentiality572, illustrating the technological innovation required to be successful in the industry. Amongst its
peers, Texas Instruments offers minimal innovation. Intel and Samsung are the market leaders with a market
shares of 14.7% and 11.5% respectively. TI receives an estimated 3.5% of the Semiconductor manufacturing
market share573. Semiconductor price is based upon demand and technology innovation. TI is the world’s
leading manufacturer for analog chips in 2016574. As Texas Instruments maintains a global presence, competing
with its competitors internationally as well as state-side, it is on par with the industry.
112
3)! General level of industry management capability:
Many Capable Managers 1 2 3 4 5 6 7 8 9 10 Few Capable Managers
Hard Data: The current President and CEO of Texas Instruments, Richard K. Templeton, has received
numerous awards for his leadership, was awarded the Best Semiconductor CEO in America three times by
Institutional Investors (Exhibit 4-HR Staffing). According to Glassdoor reviews, TI has been rated as one of the
top 50 workplaces in the nation, which is a direct reflection of positive company leadership as 92% of
employees approve of CEO Richard K. Templeton575.
Assessment of Company vs. Industry: The management at TI has received the most approval in relation to
other top executives of companies in the industry. Comparatively, Intel’s CEO, Brian Krzanich, has a 61%
approval rating on Glassdoor (178) and has 35 years of management experience. Qualcomm also has less
qualified management as its CEO, Steve Mollenkopf, has a 67% approval rating (179) and 23 years of
management experience (194). As TI’s CEO, Mr. Templeton, boast a 92% approval rating and 37 years of
management experience (192), it is an industry leader in terms of qualified management.
4)! Stage in industry life cycle: Semiconductor and Embedded Processors

Introduction Growth Maturity Decline
Hard Data: Industry-wide, the Semiconductor and Embedded Processor Manufacturing Industry is showing
signs of slow growth. The maturing industry has pushed growth through various merger and acquisition
activities, which are consolidating the industry (235). With a forecasted growth rate of 0.9% for 2016-2021576,
this M&A activity helps facilitate some industry growth.
Assessment of Company vs. Industry: Other larger players in the industry have made moves to merge and
acquire firms in order to remain competitive. Intel has recently made a $15 billion bid for Mobileye (57) and
Qualcomm purchased NXP in 2016 (58). Texas Instruments remains cautious and moderate in regards to its
merger and acquisition activities.
5)! Level of Industry Concentration:
Hard Data (Semiconductor and Embedded Processor Manufacturing: 577Market shares of: Intel Corporation
(15.1%), Samsung (11.11%), SK Hynix (4.9%), Micron (4.2%), Texas Instruments Inc. (3.7%), Qualcomm
(4.9%) and Broadcom (2.5%), Avago (2.1%), Infineon (2.1%).
Herfindahl Index: 15.1^2 + 11.11^2+ 4.9^2 + 4.2^2+ 3.7^2+ 4.9^2 + 2.5^2+ 2.1^2 +2.1^2= 445.64
$ #
H= "%& !"
Assessment of Company vs. Industry: In relation to the other competing firms, TI has one of the largest market
shares in a lowly concentrated marketplace. With a Herfindahl Index (HHI) of 445.64, the Semiconductor
Industry is not a concentrated marketplace in relation to a score of 10,000 (which indicates a monopolized
industry). TI is one of the top competitors in the industry; however, there is significant room to grow in a
fragmented industry that is increasing Merger and Acquisition activity578
563
564
Ibid.
113
565
Source: Semiconductors in the United States, Business Source Premier, Accessed March 2017.
566
Op. Cit. “Source: Semiconductor and Circuit Manufacturing in the US.”
567
Ibid.
568
Ibid.
569
Ibid.
570
Texas Instruments, “TI Fact Sheet,” http://www.ti.com/corp/docs/company/factsheet.shtml, accessed April 2017.
571
“Corporate Citizenship – Awards 2012 - 2016”, Texas Instruments,
http://www.ti.com/corp/docs/company/awardfactsheet.shtml?DCMP=Citizenship &HQS=awards, accessed April 2017.
572
Op. Cit. “Source: Semiconductors and Circuit Manufacturing in the US.”
573
Ibid.
574
Ibid.
575
Source: Global Semiconductor & Electronic Parts Manufacturing, IBISWorld, accessed March 2017.
576
Op. Cit. “Source: Semiconductor and Circuit Manufacturing in the US.”
577
Source: Bloomberg LP, accessed April 2017.
578
Op Cit., “Source: Semiconductor and Circuit Manufacturing in the US”
114
Work Cited
Batra, Anjan S and Belaji, Sheshadri. “Postoperative temporary epicardial pacing: When, how
and why?” Annals of Pediatric Cardiology 1.2 (2008): 120–125, Web. Accessed
April 2017.
Battery Management Solutions Overview, Texas Instruments, accessed March 2017.
http://www.ti.com/lsds/ti/power-management/battery- management-products-
overview.page
“Battery Manufacturing in the US, via IBISWorld, accessed March 2017.
Battery Manufacturing Report Summary, via Hoovers, accessed March 2017.
Battery Manufacturing, via Market Research, accessed March 2017.
Bloomberg LP. Accessed March 2017.
Business Insider. “The 11 Most Implanted Medical Devices in the America.”
http://www.businessinsider.com/the-11-most-implanted-medical-devices-in-america-
2011-7#9-heart-pacemakers-3. accessed March 2017.
Calculator Products, Texas Instruments, accessed March 2017.
https://education.ti.com/en/products
Chitkara, Raman, “The Internet of Things: The next growth engine for the semiconductor
industry,” PricewaterHouseCoopers, May 2015, https://www.pwc.ie/media-
centre/assets/publications/2015-pwc-iot-semicon-paper.pdf, accessed March 2017.
“Corporate Citizenship Awards 2012-2016,” Texas Instruments, accessed March 2017.
Corporate Citizenship Report, Texas Instruments, accessed April 2017
Code of Conduct, Texas Instruments, accessed April 2017
Court Rules for TI in Patent Case Brought by Licensing Company, Texas Instruments, accessed
March 2017.
Electrical Equipment Manufacturing in the US, via IBISWorld, accessed March 2017.
Fargen, Kyle, Frei, Donald, Fiorelss,David, McDougall, Cameron, Myers, Phillip, Hirsch,
Joshu, and Mocco, J. “The FDA Approval Process for Medical Devices.” Medscape.
http://www.medscape.com/viewarticle/807243_2. accessed March 2017.
Fung, Brian. “A Cure for Electric-Car Range Anxiety.” The Washington Post. 4 November 2016.
Available from Factiva, accessed March 2017.
Gallup Inc.. “U.S. Uninsured Rate at 11.0% Lowest in Eight-Year Trend.”
http://www.gallup.com/poll/190484/uninsured-rate-lowest-eight-year-trend.aspx,
Gensler, Lauren. “Knight, Swift Transportation Merge to Create $5 billion Trucking Giant”,
Forbes, April 10, 2017,
https://www.forbes.com/sites/laurengensler/2017/04/10/knight-transportation-swift-
transportation-trucking-merger/#3470e1d23b04, accessed April 2017
Global Semiconductor & Electronic Parts Manufacturing, IBISWorld. Accessed March 2017.
Giang, Vivian. “Texas Instruments Tells Employees: ‘Get Work Done, But Take Care of your
Family too’”, Feb. 6, 2013,
Global Semiconductor Report, via IBISWorld, accessed March 2017
Greenwald, Ted. “Intel Joins Silicon Valley’s Race to make ‘Best Server on Wheels’ with
Mobileye Deal”, WSJ, March 13, 2017, https://www.wsj.com/articles/intel-to-buy-
mobileye-for-15-3-billion-1489404970, accessed March 2017
115
History of Innovation, Texas Instruments, http://www.ti.com/corp/docs/company/history.html,
accessed March 2017
Internet of Things Overview, Texas Instruments, accessed March 2017,
http://www.ti.com/ww/en/internet_of_things/iot-overview.html
Joung, Yeun-Ho. “Development of Implantable Medical Devices: From an Engineering
Perspective.” International Neurourology Journal 17.3 (2013): 98–106. Web, accessed
March 2017.
“Lithium Ion Batteries,” via IBISWorld, accessed March 2017.
Locations, Texas Instruments, http://careers.ti.com/locations/,accessed April 2017
LTE Market Share, Size, Analysis and Growth 2020, Allied Market Research, accessed March
2017.
Market and Markets. “Battery Management System Market by Battery Type, Component,
Topology, Application, and Geography – Global Trend and Forecast to 2022.”
http://www.marketsandmarkets.com/Market-Reports/battery-management-bms-
market-234498189.html, accessed March 2017.
Medical Device Manufacturing in the US, via IBISWorld, accessed March 2017.
Medical Supplies Wholesaling in the US, via IBISWorld, accessed March 2017.
Medtronic. December 31, 2016. Form 10-K.
file:///C:/Users/meric/Downloads/Medtronic%20plc%20FY16%2010-
K%20and%20Shareholder%20Letter.pdf. accessed March 2017.
Metal Wholesaling, via IBISWorld, accessed March 2017.
Motor Drivers, Texas Instruments, accessed March 2017.
http://www.ti.com/lsds/ti/analog/motordrivers/overview.page
Morningstar. “Texas Instruments Inc Board of Directors.”
http://insiders.morningstar.com/trading/board-of-
directors.action?t=TXN&region=usa&culture=en-US, accessed March 2017.
Morningstar. “Texas Instruments Inc Key Executives.”
http://insiders.morningstar.com/trading/key-
executives.action?t=TXN&region=usa&culture=en-US, accessed March 2017.
NASA Quantum Artificial Intelligence Laboratory (QuAIL), National Aeronautics and
Space Administration, accessed March 2017,
https://ti.arc.nasa.gov/tech/dash/physics/quail/
Norton, Amy. “More Americans getting Pacemakers.” Reuters.
http://www.reuters.com/article/us-more-americans-getting-pacemakers-
idUSBRE88P1LN20120926. accessed March 2017.
Nyitray, Brent. “Basics of the Broadcom-Avago Merger”, Yahoo Finance, June 3, 2015, accessed March
2017
Ohio State University Wexner Medical Center. “Pacemaker: What is a Pacemaker?”
https://wexnermedical.osu.edu/heart-vascular/conditions-treatments/pacemaker. accessed
March 2017.
Page, Page, “Truckers Swift and Knight to Merge”, WSJ, April 9, 2017,
https://www.wsj.com/articles/truckers-swift-and-knight-to-merge-1491796861, accessed
April, 2017
Products, Texas Instruments,
http://www.ti.com/corp/docs/company/technology_innovation.html,
accessed April 2017
116
Semiconductors and Semiconductor Equipment, via S&P Capital IQ, accessed March 2017.
Semiconductors in the US, via Emarketer, accessed March 2017.
“Global Semiconductor Outlook”, via Bloomberg LP, accessed March 2017
“Global Semiconductor Report”, IBISWorld, accessed March 2017
“Long Distance Freight Trucking in the US”, IBISWorld, accessed March 2017
“North American Trucking Industry Primer”, via Bloomberg LP, accessed March 2017
“Road Freight in the United States”, Business Source Premier, Marketline, accessed April 2017.
“Semiconductor and Circuit Manufacturing in the US”, via IBISWorld, accessed March
2017.
Supply Chain 247. “Tesla’s Gigafactory Supply Chain Vertical Integration.”
http://www.supplychain247.com/article/telsas_gigafactory_supply_chain_vertical_integr
ation
Standard and Poor’s Net Advantage, accessed March 2017.
Talton, Jon. “Why it’s Hard to Keep Trucking – Even for PACCAR”, Seattle Times,
October 7, 2016, http://www.seattletimes.com/business/economy/why-its-harder-to-keep
-on-trucking-maybe-even-for-paccar/, accessed March 2017
Texas Instruments 300mm for Analog Technologies, Texas Instruments,
http://www.semieurope.omnibooksonline.com/2012/semicon_europa/SEMICON_TechA
RENA_presentations/Tech%20Arena%202%20-
%2009%20October/Secondary%20Equipment%20and%20Technology/02_WolfgangPlos
s_TI.pdf, accessed April 2017
Texas Instruments Code of Conduct, Texas Instruments, accessed April 2017
Texas Instruments Inc., Allowance for Doubtful Accounts Receivable, Stock Analysis on Net,
Texas Instruments Inc., December 31, 2016 Form 10-K, accessed March 2017.
Texas Instruments Inc. Company Financials, MergentOnline, accessed March 2017.
Texas Instruments Company Manufacturing, Texas Instruments, accessed March 2017.
Texas Instruments Incorporated Company Profile, DataMonitor, accessed March 2017.
Texas Instruments Incorporated Company Profile, MarketLine via Business Source Premier,
Texas Instruments Inc., “Corporate Citizenship – Awards 2012 – 2016.”
http://www.ti.com/corp/docs/company/awardfactsheet.shtml?DCMP=Citizenship
&HQS=awards. Accessed April 2017.
Texas Instruments Inc. “TI Fact Sheet.” http://www.ti.com/corp/docs/company/factsheet.shtml.
Accessed April 2017.
Texas Instruments Inc. “Medical, Healthcare, and Fitness Overview.”
http://www.ti.com/lsds/ti/applications/industrial/medical/overview.page. Accessed March
2017.
Texas Instruments Incorporated Stock Report, via S&P Capital IQ, accessed March 2017.
Texas Instruments Incorporated SWOT Analysis, LexisNexis Academic, accessed March 2017.
Texas Instruments Incorporated, December 31, 2016 Form 10-K.
http://investor.ti.com/secfiling.cfm?filingID=1564590-17-2142&CIK=97476
Texas Instruments. “Medical, Healthcare, and Fitness Overview.”
117
http://www.ti.com/lsds/ti/applications/industrial/medical/overview.page. accessed March
2017.
Texas Instruments - Yahoo Finance, Yahoo Finance, accessed March 2017.
Texas Instruments Investor Overview, Texas Instruments, accessed March 2017
US Air Carrier Traffic Statistics throughout November, United States Department of
Transportation, accessed March 2017, https://www.transtats.bts.gov/TRAFFIC/
Vantuono, William. “Autonomous Trucks – Sooner than You Think”, RailwayAge, Feb. 24,
2017,http://www.railwayage.com/index.php/intermodal/autonomous-trucks
-sooner-than-you-think.html, accessed March 2017
Who We Are, Texas Instruments, accessed March 2017
http://www.ti.com/corp/docs/company/home.html
Wilmot, Stephen. “Prepare for the Electric Car Revolution.” The Wall Street Journal. 14
December
2016. Available from Factiva, accessed March 2017.
Zaragoza, Sandra. “Lithium-Ion Battery Inventor Introduces New Technology for Fast-Charging,
Noncombustible Batteries.” UTNews, February 28, 2017. Accessed March, 2017.
https://news.utexas.edu/2017/02/28/goodenough-introduces-new-battery-technology
118

ACE Consulting Report For Texas Instruments

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ACE Consulting Report For Texas Instruments

Uploaded by

Copyright:

Available Formats

Strategic Analysis of TI

Brief History of the Company

Mission, Vision, and Values of TI, Inc.

Capital Management Strategy

1.! Computing (31%)

Samsung: The South Korean company

QUALCOMM: Received 14% of

Industry Opportunities and Threats:

A List of recent M&A:

Conclusion and Takeaways:

develops a new core competency- superior biocompatibility of embedded processors.

Self-Automated Road Freight

Energy Efficient Battery Manufacturing

•! Amplifiers •! Manufacturing Locations:

Relative Market Share1

Threat of Entry (H)

Threat of Buyers (L) Threat of Buyers (H) Threat of Suppliers (M)

companies leverage large purchases to proprietorships516. Backwards Integration (H): Certain

Threat of New Entrants

a.! Allow for users to directly ask the Computer

semiconductor chip. 2.! Produce a touch screen addition feature

1)! Degree of Technology in the industry

4)! Stage in industry life cycle: Semiconductor and Embedded Processors

5)! Level of Industry Concentration:

You might also like