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DELAWARE		001-03761		75-0289970
(State or other jurisdiction of incorporation)		(Commission file number)		(I.R.S. employer identification no.)

 

 

 

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¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Designation of Exhibit in this Report		Description of Exhibit
99		Registrant’s News Release
		Dated January 22, 2007 (furnished pursuant to Item 2.02)

 

·	Market demand for semiconductors, particularly for analog chips and digital signal processors in key markets such as communications, entertainment electronics and computing;

·	TI’s ability to maintain or improve profit margins, including its ability to utilize its manufacturing facilities at sufficient levels to cover its fixed operating costs, in an intensely competitive and cyclical industry;

·	TI’s ability to develop, manufacture and market innovative products in a rapidly changing technological environment;

·	TI’s ability to compete in products and prices in an intensely competitive industry;

·	TI’s ability to maintain and enforce a strong intellectual property portfolio and obtain needed licenses from third parties;

·	Expiration of license agreements between TI and its patent licensees, and market conditions reducing royalty payments to TI;

·	Economic, social and political conditions in the countries in which TI, its customers or its suppliers operate, including security risks, health conditions, possible disruptions in transportation networks and fluctuations in foreign currency exchange rates;

·	Natural events such as severe weather and earthquakes in the locations in which TI, its customers or its suppliers operate;

·	Availability and cost of raw materials, utilities and critical manufacturing equipment;

·	Changes in the tax rate applicable to TI as the result of changes in tax law, the jurisdictions in which profits are determined to be earned and taxed, the outcome of tax audits and the ability to realize deferred tax assets;

·	Losses or curtailments of purchases from key customers and the timing and amount of distributor and other customer inventory adjustments;

·	Customer demand that differs from company forecasts;

·	The financial impact of inadequate or excess TI inventories to meet demand that differs from projections;

·	Product liability or warranty claims, or recalls by TI customers for a product containing a TI part;

·	TI’s ability to recruit and retain skilled personnel; and

·	Timely implementation of new manufacturing technologies, installation of manufacturing equipment and the ability to obtain needed third-party foundry and assembly/test subcontract services.

 

 

		TEXAS INSTRUMENTS INCORPORATED
Date: January 22, 2007		By:		/s/ Kevin P. March
				Kevin P. March
				Senior Vice President
				and Chief Financial Officer

 

·	4Q06 TI Revenue Down 8% Sequentially, Up 4% from Year Ago

·	4Q06 EPS of $0.45, Including Research Tax Credit

·	Record TI Revenue and Profit Margins in 2006

·	High-Performance Analog Revenue Growth of 33% in 2006

·	Total TI, $3.01 billion to $3.28 billion;

·	Semiconductor, $2.95 billion to $3.20 billion; and

·	Education Technology, $60 million to $80 million.

·

Revenue in the fourth quarter was $3.39 billion. This was a decrease of 5 percent from the prior quarter due to a broad-based decline in demand. Compared with a year ago, revenue increased 4 percent primarily due to higher demand for analog products. For the year, Semiconductor revenue was $13.73 billion. This was an increase of 16 percent due to higher demand for analog products, especially high-performance analog, and DSP products.

o

In the fourth quarter, analog revenue was down 4 percent from the prior quarter primarily due to a broad-based decline in demand. Analog revenue increased 9 percent from the year-ago quarter primarily due to demand for high-performance analog products. Revenue from high-performance analog products declined 4 percent from the prior quarter and increased 22 percent from a year ago.  For the year, analog revenue increased 18 percent primarily due to demand for high-performance analog products. Revenue from high-performance analog products increased 33 percent primarily due to market-share gains. In 2006, about 40 percent of total Semiconductor revenue came from analog.

o

In the fourth quarter, DSP revenue was down 11 percent from the prior quarter primarily due to lower demand for wireless products. DSP revenue decreased 2 percent from the year-ago quarter primarily due to lower demand for broadband residential gateway as well as wireless products. For the year, DSP revenue increased 16 percent due to demand for wireless products. In 2006, about 40 percent of total Semiconductor revenue came from DSP.

o

In the fourth quarter, TI’s remaining Semiconductor revenue was 2 percent higher than the prior quarter due to higher royalties. Revenue was lower for RISC microprocessors, DLP products, standard logic products and microcontrollers. TI’s remaining Semiconductor revenue increased 5 percent from the year-ago quarter due to higher royalties and standard logic revenue. Revenue from RISC microprocessors, DLP products and microcontrollers was about even with the year-ago quarter. For the year, TI’s remaining Semiconductor revenue increased 14 percent as growth in standard logic products, DLP products, RISC microprocessors and microcontrollers more than offset a decline in royalties.

·

In the fourth quarter, gross profit was $1.73 billion, or 51.1 percent of revenue. This was a decrease of $113 million from the prior quarter due to lower revenue and an increase of $85 million from the year-ago quarter primarily due to lower depreciation. For the year, gross profit was $7.05 billion, or 51.3 percent of revenue. This was an increase of $1.28 billion, or 22 percent, due to higher revenue, as well as lower depreciation.

·

In the fourth quarter, operating profit was $908 million, or 26.8 percent of revenue. This was a decline of $100 million from the prior quarter due to lower gross profit. Operating profit was about even with the year-ago quarter. For the year, operating profit was $3.83 billion, or a record 27.9 percent of revenue. This was an increase of $1.02 billion due to higher gross profit.

·

Semiconductor orders were $3.00 billion. This was a decrease of 9 percent from the prior quarter and 12 percent from the year-ago quarter due to lower demand for DSP and DLP products. For the year, Semiconductor orders were $13.49 billion. This was an increase of 9 percent due to higher demand for analog products.

·

TI announced “eCosto,” a single-chip cell-phone technology that will lower the system costs of advanced multimedia phones, making them more affordable for the mass market.  The first product in the new “eCosto” platform integrates an OMAPTM applications processor and the modem function, using TI’s differentiated digital RF processor (DRPTM) technology. The product will be manufactured using a 65-nanometer CMOS process and will support the GSM, GPRS and EDGE wireless standards.

·	TI began sampling four new DaVinciTM processors specifically tuned for the automotive, video security and video telephony markets. The DSP-based digital media processors offer improved video performance with a 50 percent cost reduction over previous generations of TI’s digital media processors.

·

TI introduced two new high-performance analog precision operational amplifiers for the high-voltage industrial market. The first devices developed with TI’s BiCom3HV silicon germanium process technology, these 36-volt amplifiers deliver significant improvements in power consumption, bandwidth and package size.

·

In the fourth quarter, revenue was $78 million. This was a decrease of $104 million from the prior quarter due to the seasonal decline for graphing calculators with the end of the back-to-school season. It was an increase of $11 million from the year-ago quarter due to stronger demand for graphing calculators. For the year, revenue was $525 million. This was a 4 percent increase due to higher demand for graphing calculators.

·

In the fourth quarter, gross profit was $45 million, or 57.7 percent of revenue. Gross profit decreased $71 million from the prior quarter due to lower revenue, and increased $10 million from the year-ago quarter primarily due to higher revenue. For the year, gross profit of $321 million, or a record 61.1 percent of revenue, increased $21 million primarily due to higher revenue, as well as product cost reductions.

·

In the fourth quarter, operating profit was $19 million, or 23.9 percent of revenue. This was a decrease of $64 million compared with the prior quarter due to lower gross profit. It was an increase of $9 million from the year-ago quarter due to higher gross profit. For the year, operating profit was $200 million, or a record 38.0 percent of revenue. This was an increase of $12 million due to higher gross profit.

·	Market demand for semiconductors, particularly for analog chips and digital signal processors in key markets such as communications, entertainment electronics and computing;

·	TI’s ability to maintain or improve profit margins, including its ability to utilize its manufacturing facilities at sufficient levels to cover its fixed operating costs, in an intensely competitive and cyclical industry;

·	TI’s ability to develop, manufacture and market innovative products in a rapidly changing technological environment;

·	TI’s ability to compete in products and prices in an intensely competitive industry;

·	TI’s ability to maintain and enforce a strong intellectual property portfolio and obtain needed licenses from third parties;

·	Expiration of license agreements between TI and its patent licensees, and market conditions reducing royalty payments to TI;

·	Economic, social and political conditions in the countries in which TI, its customers or its suppliers operate, including security risks, health conditions, possible disruptions in transportation networks and fluctuations in foreign currency exchange rates;

·	Natural events such as severe weather and earthquakes in the locations in which TI, its customers or its suppliers operate;

·	Availability and cost of raw materials, utilities and critical manufacturing equipment;

·	Changes in the tax rate applicable to TI as the result of changes in tax law, the jurisdictions in which profits are determined to be earned and taxed, the outcome of tax audits and the ability to realize deferred tax assets;

·	Losses or curtailments of purchases from key customers and the timing and amount of distributor and other customer inventory adjustments;

·	Customer demand that differs from company forecasts;

·	The financial impact of inadequate or excess TI inventories to meet demand that differs from projections;

·	Product liability or warranty claims, or recalls by TI customers for a product containing a TI part;

·	TI’s ability to recruit and retain skilled personnel; and

·	Timely implementation of new manufacturing technologies, installation of  manufacturing equipment and the ability to obtain needed third-party foundry and assembly/test subcontract services.