✦ The Data Centre, From the OutsideNarrow moat
Texas Instruments (TXN) — the future bets
TI sells the power and signal-chain parts around the accelerators, which is a smaller position in the AI boom and a far more durable one.
Texas Instruments does not make AI accelerators, and that is the point of its data-centre business.
Data centre was 9% of TI's 2025 revenue, disclosed across data-centre compute, data-centre networking, and rack power and thermal management.1 In the June 2026 quarter it roughly doubled year over year.2 The parts are power delivery, signal chain and thermal management — the components that sit around an accelerator rather than the accelerator itself.
That is a smaller position in the AI boom and a considerably more durable one. TI is not competing with Nvidia, Broadcom or AMD for a socket that gets re-designed every eighteen months; it is selling the power and interface parts that every generation of every architecture needs, with the design-in longevity that characterises the rest of its business.
The comparison worth making is with Vertiv, elsewhere in this collection: both sell the infrastructure around the computers rather than the computers, and both benefit whichever accelerator wins.
At 9% of revenue it is not yet large enough to change the company. Doubling from 9% would make it the third end market.
Watch the data-centre share of revenue, which TI discloses annually. It is the only end market here growing faster than the cycle.
Data centre was 9% of 2025 revenue and roughly doubled year over year in the June 2026 quarter. It is the only end market growing faster than the cycle.
Data-centre compute, data-centre networking, and rack power and thermal management — the components around an accelerator rather than the accelerator. That is a smaller position in the AI boom and a far more durable one, since TI is not re-competing for a socket every eighteen months. It is the only end market growing faster than the cycle.
Source: Texas Instruments Form 10-K, FY2025 ↗- ReportedData centre was 9% of TI's 2025 revenue, disclosed across data-centre compute, data-centre networking, and rack power and thermal management.Texas Instruments Incorporated, Form 10-K for the year ended 31 December 2025 (SEC, CIK 97476) — Item 1, Business. TI's two reportable segments are Analog and Embedded Processing, with remaining activities in Other; operations began in 1930 and it has design, manufacturing or sales operations in more than 30 countries. The product portfolio includes more than 80,000 products. TI states four sustainable competitive advantages: a strong foundation of manufacturing and technology, a broad portfolio of analog and embedded processing products, the reach of its market channels, and the diversity and longevity of its products, markets and customer positions, which in combination it describes as difficult to replicate. An unpackaged chip built on a 300mm wafer costs about 40% less than one built on a 200mm wafer; TI continued qualifying and ramping production at its newest 300mm fabs in Richardson and Sherman, Texas, and Lehi, Utah, supporting external foundry transfers and internal transfers from its legacy 150mm facilities, and expects to maintain sufficient internal capacity to meet the majority of its production needs, offering customers geopolitically dependable capacity. TI sells to over 100,000 customers, with about half of revenue derived from customers outside its largest 50; more than 80% of revenue was direct in 2025, including TI.com. End markets as a percentage of 2025 revenue: industrial 33%, automotive 33%, personal electronics 21%, data centre 9%, communications equipment 3%, and calculators about 1%. About 60% of revenue comes from customers headquartered outside the United States; revenue from end customers headquartered in China represented about 20% of revenue in 2025, while revenue from products shipped into China represented about 50%. The analog and embedded processing markets remain highly fragmented, with significant global competition from dozens of large and small companies including emerging companies, particularly in Asia. The company's stated objective is the growth of free cash flow per share over the long term. — FY2025 · publ. 2026-02-06 · source ↗
- ReportedData centre was 9% of TI's 2025 revenue, disclosed across data-centre compute, data-centre networking, and rack power and thermal management. In the June 2026 quarter it roughly doubled year over year.Texas Instruments Incorporated, Form 10-Q for the quarter ended 30 June 2026 (SEC, CIK 97476). Revenue $5,463M against $4,448M a year earlier, and $10,288M for the six months against $8,517M; cost of revenue $2,111M; gross profit $3,352M against $2,575M — a 61.4% gross margin against 57.9%; research and development $535M against $527M; selling, general and administrative $490M against $485M; acquisition charges $17M; operating profit $2,310M against $1,563M. Income before income taxes $2,238M; provision for income taxes $258M; net income $1,980M against $1,295M. Basic EPS $2.16 and diluted EPS $2.14, against $1.42 and $1.41, on 920 million diluted shares. — Q2 2026 · publ. 2026-07-24 · source ↗