Texas Instruments (TI) Expands Price Hike to Industrial and Automotive Chips, Signaling Shift from "Price War" to Profit Focus

TI has announced a new round of price increases effective August, following an initial adjustment in June. This broader and steeper hike targets industrial control, automotive, and computing-related chips (e.g., LDO, DC-DC, isolators), extending to distributors and even in-transit goods. Key adjustments include: over 40% of industrial chips rising (e.g., 16-bit ADC up 28%), automotive-grade ICs surging 18-25%, and consumer electronics up 5-15%.

The move reflects TI’s strategic pivot to protect margins. With Q1 2025 gross profit falling to 64.2% (a 3-year low), TI aims to phase out low-margin products and prioritize high-value segments like automotive and industrial. Strong auto revenue growth (+12% QoQ) and historically low inventory support this adjustment.

The analog chip market shows early recovery signs, as top suppliers’ inventory days drop below 45. Industry average selling prices are projected to rise 8-12% QoQ in Q3 2025, with gross margins exceeding 65%. Competitors like ADI and Infineon may follow suit, while some TI parts could see 300% spot premiums.