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TI chip prices significantly reduced!
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TI chip prices significantly reduced!

TI chip prices significantly reduced!

June 07, 2023

Recent news indicates that after experiencing two consecutive quarters of declining revenue and net profit, Texas Instruments (TI) lowered chip prices in the Chinese market in May, attempting to seize more market share during the darkest moments before the industry's recovery.


As we all know, analog chips can be divided into general-purpose analog chips and dedicated analog chips. General-purpose analog chips include power management and signal chain, which are the main targets of TI's price reduction strategy, especially in the field of power management chips, where many Chinese companies have developed considerable scale and products that have gradually gained a foothold in the high-end market. Therefore, most industry insiders believe that power management chips are the main targets of TI's targeted attack.


Currently, TI only has one authorized agent in China, Arrow Electronics. After its product line was fully reduced in price, other electronic component agents quickly noticed the market changes, and some other overseas analog chip companies' market shares in China began to be impacted.


Many market insiders believe that TI's price reduction strategy in China is likely to show results in the second quarter of this year. Its revenue is expected to rebound, but its profit performance will not change significantly due to the impact of the price reduction strategy.


It is worth noting that we are currently at the cyclical bottom of the semiconductor industry. TI's price reduction strategy at this turning point needs to attract the attention of local analog chip companies because once the market begins to rebound, TI will inevitably take the largest share of the cake in the next wave of the market.


Some analysts believe that although some dedicated analog chips with longer verification cycles and more dispersed types have not been affected, if TI's price reduction strategy continues to extend, it is only a matter of time before customers switch back to imported products. It is important to note that TI has a more complete range of products, with more than 80,000 chip products, while the Chinese analog chip company with the most products, Sunlord Electronics, has only over 4,000 products.


Furthermore, TI's price reduction strategy has, to some extent, ended the domestic substitution dividend in the analog chip industry. Domestic manufacturers should no longer be satisfied with the current situation of "being able to use" and "being sufficient" for their products. They should instead polish their products to the level of "being good to use" with a sense of urgency and think about how to break through the cost barrier to cope with the pitfalls that TI has laid down through price reductions and the opportunities hidden in the next wave of market rebound.

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