TXN's 300mm Fab Strategy Reaffirmed, but Near-Term Risks Keep Rating at Wait

What happened

The latest article highlights Texas Instruments' 300mm fab expansion as a key lever to boost margins through lower wafer costs, higher utilization, and reduced capital spending, which aligns with the company's disclosed cost advantage of about 40% versus 200mm. However, the DeepValue master report maintains a WAIT rating with conviction 3.5, citing a stretched valuation (P/E 45.6, EV/EBITDA 31) and the need to confirm that the industrial recovery isn't a short-lived restock burst. The report's key near-term checkpoints are Q2'26 revenue landing within the $5.0B–$5.4B guidance and inventory days continuing to trend below 209, which have not yet been confirmed as of this article's date. Tariff exposure remains a material risk, with 21% of 2025 revenue from China-headquartered customers and about 50% shipped into China, potentially disrupting deliveries or causing customer switching. While the 300mm strategy supports long-term margin expansion, the current price already reflects a durable recovery, leaving limited margin of safety until execution is verified.

Implication

If TXN delivers Q2'26 revenue at or above $5.0B and inventory days fall below 200, the stock could re-rate higher as the recovery proves durable and margin expansion accelerates. However, until those checkpoints clear, the risk of a false start or tariff disruption keeps risk-adjusted returns unattractive at current levels, suggesting investors should wait for a pullback to the $230 area or confirmation of sustained demand.

Thesis delta

The article does not change the WAIT thesis; it reinforces the existing long-term margin story from 300mm scaling. No shift in rating or conviction is warranted, as the key uncertainties (industrial durability, inventory, tariffs) remain unresolved.