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Company: Texas Instruments (TXN)
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50%
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2 votes

  End market pricing pressures and competition provide for volatility

End market demand and pricing pressures, as well as competition within the semiconductor industry, all contribute to the volatility inherent in the semiconductor industry. $100 invested in an S&P 500 index fund on December 31, 2001, for example, was worth $135 on December 31, 2006, while the same investment in TI had increased in value to only $105.

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33%
agree
3 votes

  TI's revenue recognition policies are more aggressive

TI's revenue recognition policies are more aggressive, and consequently riskier, compared to many of its competitors. While its competitors recognize revenue on "sell-through" at domestic distributors, TI recognizes revenue when shipping products, rendering it vulnerable to any corrections later on. In other words, Texas Instruments recognizes revenue at an earlier stage compared to its rivals.

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40%
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5 votes

  Low profit margin on products

Lower-margin commodity products can be a source of exposure of Texas Instruments if competition forces prices downward. They currently still make up approximately 25% of TI's sales.

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