According to news on February 27, according to industry reports, analog chip manufacturer Texas Instruments (TI) recently laid off one of its chip design teams in Beijing, China. It is understood that the team is mainly responsible for the research and development of relatively low-end power management chips, with a team size of about 50 people. It is worth noting that as early as May 2022, Texas Instruments was exposed to have abolished the MCU R&D team located in the Shanghai R&D Center in China, and moved the original MCU R&D line to India.
Subsequently, Texas Instruments officially issued a statement in response, saying that "Texas Instruments China has not laid off any employees" and "will continue to invest in the Chinese market."
However, according to subsequent information, Texas Instruments has indeed abolished the MCU R&D team in China, retaining only the market and applications, and moved all the original MCU product lines to India. All team members have been dispersed and assigned to other product lines, with nominal positions and salaries remaining unchanged. Texas Instruments only gives employees two choices: either accept the arrangement to work in other product lines, or resign on their own initiative.
The news that Texas Instruments has laid off its Beijing power management chip design team may be related to the declining performance of Texas Instruments and the fierce competition in the domestic power management chip market. Of course, trade tensions between China and the United States may also be a factor.
According to the fourth quarter financial report released by Texas Instruments last year, revenue was US$4.08 billion, down 10% month-on-month and 13% year-on-year; net profit was US$1.37 billion (earnings per share of US$1.49), down 30% year-on-year, far below analysts' consensus expectations. At the same time, Texas Instruments' performance guidance for the first quarter of this year was also significantly lower than market expectations. This also reflects that the analog chip industry has been greatly affected by the semiconductor down cycle. Even if Texas Instruments is the leader in the analog chip industry, it is difficult to be alone, and analog chips have not yet recovered.
Texas Instruments President and CEO Haviv Ilan said: "In the fourth quarter of 2023, we experienced increasing weakness in the industrial sector and a sequential decline in the automotive sector." Texas Instruments Chief Financial Officer Rafael R. Lizardi even pointed out in an interview that the recent economic downturn is different from the past. Various industries have experienced declines at different times, he said. "
In addition, the analog chip price war launched by Texas Instruments in the Chinese market last year also had a negative impact on Texas Instruments' performance. At the end of May 2023, news came out in the industry that Texas Instruments, a major U.S. analog chip manufacturer, had completely lowered the price of general analog chips for the Chinese market in May 2023. Against the background of declining market demand, Texas Instruments tried to stimulate demand through a "price war" and use this to regain the market share that was previously seized by domestic chip manufacturers during the chip shortage period. At that time, a senior executive of a domestic analog chip factory revealed that "Texas Instruments' price reduction does not have a fixed range or bottom line."
Obviously, the analog chip price war launched by Texas Instruments does not seem to have a positive impact on the company's performance. Because judging from the revenue of each business unit, in the fourth quarter of fiscal year 2023, Texas Instruments' analog chip (power management chips are analog chips) business revenue was US$3.12 billion, a year-on-year decrease of 12%, which is higher than the decline in Texas Instruments' overall revenue.