Texas Instruments Sees First Sequential Revenue Growth in 16 Years, Fueled by Surging Data Center Demand
DALLAS – In a sign of shifting tides for the semiconductor industry, Texas Instruments Inc. (NASDAQ: TXN) announced quarterly results that surprised analysts with their strength, particularly in the burgeoning data center market. The company reported a staggering 70% year-over-year increase in orders from data center customers, a surge it attributes directly to the compute and power management needs of artificial intelligence infrastructure.
The analog and embedded processing chipmaker, a bellwether for industrial and automotive electronics, stated it will begin reporting its data center business as a separate segment, underscoring its transformation from a niche area to a primary growth engine. This move provides investors with greater transparency into a sector that is rapidly absorbing capital amid the global AI boom.
Perhaps more significant for the broader market narrative was management's guidance. Texas Instruments projected its first sequential revenue growth in 16 years for the upcoming quarter, a milestone not seen since 2008. Executives pointed to "encouraging signs of stabilization" in its core industrial markets alongside the data center momentum as dual drivers for the optimistic outlook.
"What we're seeing is a powerful convergence," said CFO Rafael Lizardi during the earnings call. "The historical cyclical recovery in industrial is being amplified by structural, long-term demand from data centers. This isn't just a spike; it's a fundamental recalibration of demand across our portfolio."
The company's chips, which manage power, signal, and data in everything from factory robots to electric vehicles, are now finding critical applications in the servers and cooling systems that power AI training and inference. This positions Texas Instruments to capture value from the AI wave indirectly, through the essential infrastructure that enables it.
Market Reaction & Analyst Commentary
The announcement sent shares higher in after-hours trading. The decision to segment its data center revenue is seen as a confident move, signaling to the market that this growth is sustainable and merits dedicated scrutiny.
Sarah Chen, Portfolio Manager at Horizon Capital: "This is a textbook example of a legacy industrial player successfully pivoting to capture next-generation demand. The sequential growth guidance is the clearest signal yet that the prolonged semiconductor down-cycle is turning. TI's diversified model is proving its resilience."
Michael Dobbs, Independent Tech Analyst: "Let's not get carried away. A 70% jump on what was a tiny base is impressive, but it's still a small piece of the pie. The real story is whether the industrial recovery has legs. TI is betting the farm on a manufacturing renaissance that may be fragile. This feels like a lot of hope priced in on one quarter's data."
David Park, Engineer at a Cloud Infrastructure Firm: "From the ground level, the demand is very real. We're specifying more of TI's power management and interface chips in every new server rack design for AI workloads. Their reliability in harsh, high-uptime environments is unmatched. This breakout reporting is long overdue."
Linda Martinez, Retail Investor & 'The Frugal Financier' Blogger: "Finally! I've been holding TXN through years of 'wait for the industrial recovery.' This data center news is the catalyst we needed. Separating the segment shows management knows they've got a winner. This could be the start of a major re-rating for the stock."
As the semiconductor sector navigates a post-pandemic landscape, Texas Instruments' results offer a nuanced snapshot: traditional markets are stirring while new, AI-adjacent opportunities are exploding into material contributors. The company's ability to serve both worlds will be tested in the quarters ahead.