TI Announces Major Price Increases

According to industry sources, Texas Instruments (TI) plans to implement price increases across select product lines, with a preliminary price adjustment list finalized on June 2nd. The new pricing structure, affecting over 3,300 part numbers, is set to take effect from June 15th.

The price increases exhibit a clear tiered pattern: approximately 9% of affected parts will see hikes of 100% or more, 5% will rise between 50% and 100%, 1% between 30% and 50%, while the majority—55%—will experience increases from 15% to 30%, and the remaining 30% will have adjustments below 15%. Overall, the average increase exceeds 10%, with certain parts facing significant hikes ranging from 40% to 70%, indicating a strong upward pricing trend.

The adjustments primarily focus on three categories: products with low profit margins, older part numbers, and items where committed order volumes were not met. Notably, analog signal chain components such as ADCs and operational amplifiers have seen unexpected price increases of 100% or more. Products that had undergone substantial price reductions previously, including isolation components, LDO regulators, and DC-DC converters, are seeing more moderate increases around 20%, aligning with expectations.

Market participants have confirmed the price adjustments for TI products effective June 15th, noting this is a global price revision rather than one limited to any specific region. In the China market, the price increases largely target low-margin products such as operational amplifiers, interface ICs, and ADCs.

In recent years, TI adopted aggressive pricing strategies to outpace competitors, which led to margin compression. While the company's gross margin reached a peak of nearly 70.2% in Q1 2022, it declined to 57.2% by Q1 2024.

Alongside the price adjustments, positive signals point toward industry recovery. TI reported Q1 revenue of $4.069 billion, an 11% year-over-year increase and a 2% rise quarter-over-quarter. The company forecasts Q2 revenue between $4.17 billion and $4.53 billion, surpassing market expectations of $4.1 billion. This reflects a broader recovery in the analog semiconductor sector, overcoming inventory corrections from previous quarters. Additionally, recent financial reports from Analog Devices (ADI) indicate revitalization across all industrial sub-segments, with reduced channel inventory and anticipated quarter-over-quarter revenue growth in the upcoming quarter.