We discussed earlier, that Intel has decided to work on a chip that would power iPhone’s competitors. Other companies will also try to go after this important hyper-integrated chip that combines processing power, lowers power consumption to the limits, and handles high-end functions like video, GPS, etc.
In the entire semiconductor landscape, the company that really knows how to do this effectively, is Texas Instruments. Building upon decades of experience, TI has become one of the top players in wireless chips, closely followed by Qualcomm. It is also a leader in Digital Signal Processing (DSP), important for all video-heavy applications, and if the iPhone is to become a video-phone, we need strong DSP capability.
Finally, hyper-integration and low-power design are two other key design areas that the company understands really well.
TI is most likely not supplying the chip for Apple’s iPhone in the short run. However, in the long run, if Intel categorically powers Apple’s competitors, Samsung powers its own, and Qualcomm loses the standards battle, then the most likely candidate to be able to power the iPhone, would become Texas Instruments.
It’s a great company with deep, deep technology, and a long tradition of innovation. The stock is still reasonably cheap with a P/E of 11.65, and with solid fundamentals.
I also have a personal soft corner for TI, because I did my first summer job there back in 1991.