Analog Is Seventy-Nine Percent of ItNarrow moat

Texas Instruments (TXN) — moat facet

Analog is $14 billion of $17.7 billion and all of the margin premium — one segment wearing a diversified company's clothes.

Two segments, and one of them is the company.

Revenue by segment, 2025 ($bn)$14.01bn 79%Analog$2.70bn 15%Embedded Processing$0.98bn 6%OtherAnalog grew 26% year over year in Q2 2026 against Embedded Processing's 16%.
The concentration is getting worse, not better.

Analog was $14.01 billion of TI's $17.68 billion of 2025 revenue — 79% — and it carried the margin, at a 38.6% operating margin against the company's 34.1%.1 It covers power products and the signal chain: amplifiers, data converters, interface, motor drives, clocks and sensing.2

Embedded Processing is the smaller half at $2.70 billion, and it has been the weaker one through the downturn — microcontrollers and processors that handle specific tasks in a piece of equipment. It grew 16% year over year in the June 2026 quarter against Analog's 26%.3

The concentration is worth naming plainly, because TI's diversification argument is about customers and end markets rather than about products. This is a company with one dominant product segment, and if the analog cycle is bad, TI is having a bad year no matter how many end markets it serves.

That is exactly what 2023-24 demonstrated: revenue fell from $20.03 billion to $15.64 billion and operating profit from $10.14 billion to $5.47 billion.4

The number is Analog operating margin, because it is four-fifths of the company and the whole of the premium.

Moat trajectory: Narrowing

Analog was 79% of 2025 revenue and grew 26% year over year in the June 2026 quarter against Embedded Processing's 16%. The product concentration is getting worse rather than better, which makes the diversification argument narrower each year.

The number that tests this moat
Reported
Analog share of revenue
79% — $14,006M of $17,682M

At a 38.6% operating margin against the company’s 34.1%. Embedded Processing was $2,700M and grew 16% year over year in the June 2026 quarter against Analog’s 26%, so the concentration is widening rather than narrowing. TI’s diversification argument is about customers and end markets; on products this is a one-segment company.

Source: Texas Instruments Form 10-K, FY2025 ↗
⚠ Threats to the moat
⚠ THREAT 01
The Diversification Is About Customers, Not Products
All six end markets and all hundred thousand customers turn at the same time, because they are buying the same category of part.
References
  1. ReportedAnalog was $14.01 billion of TI's $17.68 billion of 2025 revenue — 79% — and it carried the margin, at a 38.6% operating margin against the company's 34.1%.
    Texas Instruments Incorporated, Form 10-K FY2025 — consolidated statements of income and segment results. Revenue $17,682M, up $2.04bn or 13.0%; gross profit $10,081M; operating profit $6,023M; other income net $230M; interest and debt expense $543M; income before income taxes $5,710M; provision for income taxes $709M at an effective rate of 12.4% (12.0% in 2024); net income $5,001M against $4,799M in 2024 and $6,510M in 2023. Basic EPS $5.47 and diluted EPS $5.45, against $5.20 and $7.07 in the two prior years, on 913 million diluted shares. By segment, Analog revenue $14,006M (2024 $12,161M, +15%) with operating profit $5,412M (2024 $4,608M, +17%) at 38.6% of revenue (37.9%); Embedded Processing $2,700M; Other the remainder. Revenue peaked at $20,028M in 2022 with operating profit of $10,140M, and troughed at $15,641M in 2024 with operating profit of $5,465M. — FY2025 · publ. 2026-02-06 · source ↗
  2. ReportedAnalog was $14.01 billion of TI's $17.68 billion of 2025 revenue — 79% — and it carried the margin, at a 38.6% operating margin against the company's 34.1%. It covers power products and the signal chain: amplifiers, data converters, interface, motor drives, clocks and sensing.
    Texas Instruments Incorporated, Form 10-K FY2025 — consolidated statements of income and segment results. Revenue $17,682M, up $2.04bn or 13.0%; gross profit $10,081M; operating profit $6,023M; other income net $230M; interest and debt expense $543M; income before income taxes $5,710M; provision for income taxes $709M at an effective rate of 12.4% (12.0% in 2024); net income $5,001M against $4,799M in 2024 and $6,510M in 2023. Basic EPS $5.47 and diluted EPS $5.45, against $5.20 and $7.07 in the two prior years, on 913 million diluted shares. By segment, Analog revenue $14,006M (2024 $12,161M, +15%) with operating profit $5,412M (2024 $4,608M, +17%) at 38.6% of revenue (37.9%); Embedded Processing $2,700M; Other the remainder. Revenue peaked at $20,028M in 2022 with operating profit of $10,140M, and troughed at $15,641M in 2024 with operating profit of $5,465M. — FY2025 · publ. 2026-02-06 · source ↗
  3. ReportedIt grew 16% year over year in the June 2026 quarter against Analog's 26%.
    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 ↗
  4. ReportedThat is exactly what 2023-24 demonstrated: revenue fell from $20.03 billion to $15.64 billion and operating profit from $10.14 billion to $5.47 billion.
    Texas Instruments Incorporated, Form 10-K FY2025 — consolidated statements of income and segment results. Revenue $17,682M, up $2.04bn or 13.0%; gross profit $10,081M; operating profit $6,023M; other income net $230M; interest and debt expense $543M; income before income taxes $5,710M; provision for income taxes $709M at an effective rate of 12.4% (12.0% in 2024); net income $5,001M against $4,799M in 2024 and $6,510M in 2023. Basic EPS $5.47 and diluted EPS $5.45, against $5.20 and $7.07 in the two prior years, on 913 million diluted shares. By segment, Analog revenue $14,006M (2024 $12,161M, +15%) with operating profit $5,412M (2024 $4,608M, +17%) at 38.6% of revenue (37.9%); Embedded Processing $2,700M; Other the remainder. Revenue peaked at $20,028M in 2022 with operating profit of $10,140M, and troughed at $15,641M in 2024 with operating profit of $5,465M. — FY2025 · publ. 2026-02-06 · source ↗
Sources
Generated September 23, 2026