Texas Instruments (TXN.US), a chip giant focusing on analog chips and embedded processing solutions, released its earnings report in the morning of July 23rd. After the release of the financial data and the management's performance outlook, the share price of this giant, which mainly provides key chips to global major automakers and industrial equipment manufacturers, dropped sharply by more than 11% in after-hours trading on the US stock market. The main reason is that the market is worried that the surge in chip demand driven by Trump's tariff policy might just be a flash in the pan. Texas Instruments failed to set a good start for the earnings season of the chip giants. After the release of its results, the share prices of US chip companies including NVIDIA, Broadcom and AMD weakened significantly after the market closed.

Texas Instruments' management said in a statement on Tuesday Eastern Time that total revenue in the third quarter would reach between 4.45 billion and 4.8 billion US dollars. Although the average expectation of Wall Street analysts was $4.57 billion, some analysts' predictions slightly exceeded $4.8 billion. For Texas Instruments, whose share price has repeatedly hit new highs since the beginning of this year and where the market widely expected Trump's tariff policy to drive a surge in domestic demand for analog chips, this cautious earnings outlook clearly did not satisfy the market.

For the third quarter, Texas Instruments' earnings per share are expected to be around $1.48, slightly lower than the average expectations of analysts. This brings uncertainty to the return of the US chip giant's performance to growth and the recovery process of demand for analog chips.

Texas Instruments' overall revenue has been on a recovery track since 2024, but the global tariff campaign launched by Trump in April has made the demand outlook uncertain. Texas Instruments executives said in a earnings call with analysts that they did see strong domestic demand in the US due to tariffs at the beginning of the second quarter, as well as some customers possibly increasing their inventories to cope with the potential price hikes caused by tariffs. However, after the second quarter, the company's chip order levels have dropped back to the expected range during a normal recovery.

Chief Financial Officer Rafael Lizardi said at the earnings conference: "We are very confident in our strategy and we believe that our opportunities outweigh the challenges."

According to the median forecast, revenue in the third quarter is expected to increase by 11%, a slowdown compared to the previous quarter. However, Lizadi said that the chipmaker still has confidence in eventually breaking through the annual revenue peak of 20 billion US dollars.

After the release of its financial report and earnings outlook, Texas Instruments' share price dropped by more than 11% in after-hours trading on the US stock market. Since the beginning of the year, driven by the continuous recovery of demand for analog chips and MCUS due to artificial intelligence and inventory factors, as well as the strong rally of global semiconductor-related stocks, this stock has risen by more than 15% cumulatively, significantly outperforming the S&P 500 index.