Texas Instruments (NASDAQ: TXN) is the world’s largest maker of analog semiconductor chips. That makes the company seem out of step these days, given the buzz around artificial intelligence (AI) semiconductor chips.
Many people still think of calculators when they think of Texas Instruments, but the company has a long history of innovation, including the first commercial silicon transistor and the transistor radio in 1954, the first handheld calculator in 1967, and the first microcontroller in 1970.
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The growth of AI isn’t a bad thing for Texas Instruments. Its analog chips are the backbone of many data centers. The technology company’s sales to data centers grew 70% year over year, CEO Haviv Ilan said in the company’s fourth-quarter earnings call. AI servers need high-performance power management and signal-chain chips — which the company specializes in — to manage the massive amounts of electricity data centers consume.
Let’s begin with its dividend history, which includes 22 consecutive years of increases, including a 4% raise in 2025. It has a dividend yield, at its current share price, of 2.9%. Over the past decade, the company has boosted its dividend by 273%.
Over the past few years, Texas Instruments has spent $30 billion on a new 300-millimeter semiconductor fabrication facility in Sherman Oaks, Texas. The site, which just began production in December, will primarily focus on mature process chips that are widely used in automotive, industrial, and consumer electronics. Its plan is designed to reduce its exposure to outside foundries, allowing the company to guarantee stable, high-volume production for decades. Keeping that production in the U.S. also helps it avoid tariff concerns.
Even in years when Texas Instruments had heavy capital expenditures (capex), such as the $4.7 billion in capex it spent in 2025, it has had predictable dividend increases. Now that the company has signaled its capex is slowing, from a high of $5 billion to between $2 billion and $5 billion per year, its free cash flow is likely to increase. In 2025, cash flow was $2.9 billion, up 96% from the prior year.
In 2025, Texas Instruments reported $17.7 billion in revenue, up 13%, while earnings per share (EPS) increased 4.8% to $5.45.
