Wafer-scale technology could deliver 100X the performance while using 90% less energy...
Dear Fellow Investor,
While everyone’s fighting over AI scraps...
Trump just triggered what I believe is the biggest tech disruption since the internet.
I’m George Gilder. I’ve been calling tech revolutions for 40+ years.
When I predicted cell phones would change everything in 1991, people laughed.
When I said streaming video would kill Blockbuster in 1994, Wall Street ignored me.
When I called Amazon’s dominance in 1996, investors shrugged.
Those “crazy” predictions were followed by insane returns:
- Apple: 249,900% since IPO
- Netflix: 112,700% from going public
- Amazon: 216,100% since IPO
Now I see something even BIGGER brewing…
I see the death of big data centers coming. And My research suggests three companies are making it happen: building what I call the “Trillion Dollar Triangle”:
- Wafer-scale chips 100X faster than current systems
- 90% energy reduction
- Technology that makes AI data centers unnecessary
Make no mistake... This could be one of the biggest opportunities I’ve seen in over four decades.
>> Get the three company names before Wall Street catches on <<
To the future,
George Gilder
Editor, Gilder’s Technology Report
Texas Instruments Executes a $7.5B Deal and an AI Strategy Pivot
Written by Jeffrey Neal Johnson. Posted: 2/7/2026.
In Brief
- Texas Instruments' acquisition of Silicon Labs allows the company to fill its massive new fabrication plants with high-volume products, driving long-term profitability.
- Rapid expansion in the data center sector is fueling revenue growth as the company supplies essential analog chips required for artificial intelligence infrastructure.
- A transition from peak capital spending to cash generation secures the long-running streak of dividend growth and supports future returns to shareholders.
Semiconductor investors have spent much of the last year waiting for the cycle to turn, but Texas Instruments (NASDAQ: TXN) hasn't waited. In early February 2026, the Dallas-based chipmaker signaled a major shift in its corporate strategy. The stock has shown resilience, trading near its 52-week high of $224 despite a mixed earnings report.
That resilience reflects two catalysts that have reshaped the stock's narrative. First, the company announced a blockbuster $7.5 billion acquisition intended to fill its new factories. Second, earnings showed the industrial sector is slowly recovering while demand from data centers is surging.
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Discover the gold income breakthrough most investors are missing.By using its strong balance sheet to acquire competitors and capitalizing on the artificial intelligence (AI) infrastructure boom, TI is positioning itself to generate durable cash flow and expand margins.
The $7.5 Billion Bet: Why TI Is Buying Silicon Labs
The headline for shareholders is the definitive agreement to acquire Silicon Labs (NASDAQ: SLAB). This all-cash transaction creates a new path for expansion in a competitive market. Under the terms of the deal, Texas Instruments (TI) will pay $231 per share, valuing the enterprise at roughly $7.5 billion.
While the price tag is sizable, the strategic rationale centers on long-term manufacturing efficiency rather than short-term revenue. Over the last five years, TI has spent billions building large fabrication plants (fabs) in Sherman, Texas, and Lehi, Utah.
Those new plants use 300mm wafers. In the semiconductor industry, wafer size matters: a 300mm wafer is larger than the 200mm wafers many competitors use, allowing TI to print more chips per wafer and lower the cost per chip by roughly 40%. But those massive fabs are only profitable when running near capacity — they need volume.
Silicon Labs, a leader in wireless connectivity for the Internet of Things (IoT), provides that volume. By acquiring Silicon Labs, TI captures a steady stream of high-volume product demand and plans a reshoring strategy that includes:
- Transferring production: moving Silicon Labs' manufacturing from external foundries to TI's internal 300mm fabs;
- Cutting costs: using the cheaper 300mm process to reduce per-chip costs;
- Realizing synergies: management expects these changes to generate about $450 million in annual savings within three years.
By buying volume to fill its own factories, TI converts empty capacity into a meaningful profit engine.
AI Power: Data Center Growth Offsets Industrial Miss
Alongside the acquisition, Texas Instruments released financial results for the fourth quarter of 2025 that painted a mixed picture. On the surface, the numbers were slightly soft:
- Revenue: $4.42 billion (up 10% year over year).
- EPS: $1.27 (missed estimates by $0.02).
Normally, an earnings miss would pressure the stock. Instead, TXN shares held firm because investors focused on where the growth was coming from. The standout was the Data Center segment.
Data center revenue surged by about 70% year over year, driven by the global build-out of AI infrastructure. AI servers run hot and consume large amounts of power, so they require specialized analog chips to manage voltage and thermal conditions efficiently. TI doesn't make the expensive AI processors (such as those from NVIDIA (NASDAQ: NVDA)), but it supplies the essential power-management and analog components that make those processors usable at scale.
This AI-driven demand provided a crucial offset to slower areas of the business. The Industrial and Automotive segments — which together account for nearly 75% of total revenue — remain in early recovery, but management's guidance for the first quarter of 2026, projecting revenue between $4.32 billion and $4.68 billion, suggests the industrial slowdown may have bottomed.
The Payoff: How Policy and Strategy Boost the Bottom Line
For conservative investors, the most compelling case for holding Texas Instruments is the rapid improvement in its financial health. The company appears to be shifting from an investment-heavy phase to one focused on cash generation.
The key metric to watch is free cash flow (FCF), which measures the cash a company generates after paying operating expenses and capital expenditures (CapEx). FCF is the cash available to pay dividends, repurchase stock, or reduce debt.
In 2025, TI's FCF jumped to $2.9 billion, a 96% increase year over year. Two main factors explain the surge:
- Peak spending is over: CapEx peaked in 2025 at $4.6 billion. For 2026, management expects spending to decline to $2 billion–$3 billion, so cash flow should improve as capex falls.
- Government incentives: Effective Jan. 1, 2026, TI began benefiting from a 35% Investment Tax Credit (ITC) under the U.S. CHIPS Act, which effectively reimburses a substantial portion of equipment and construction costs and directly boosts the bottom line.
That financial pivot underpins the dividend. Texas Instruments has raised its dividend for 22 consecutive years and currently pays $1.42 per share each quarter (an annualized yield of about 2.5%). With cash flow rising and capital spending falling, TI has ample room to maintain the dividend and continue buybacks.
A Calculated Bet on Manufacturing and AI
Texas Instruments is executing a deliberate long-term plan: it built domestic manufacturing capacity, and now it is using acquisitions to fill that capacity with high-margin products. The Silicon Labs deal is a clear example of turning fixed-capacity investments into scalable profitability.
Risks remain — notably the regulatory and closing timeline that could extend to 2027 — but the company's fundamentals are strengthening now. The roughly 70% growth in data center revenue shows TI is a direct beneficiary of the AI boom, while stabilization in industrial markets reduces downside risk.
For investors, the combination of rising free cash flow, a secure and growing dividend, and a clear path to higher profit margins makes the current valuation attractive. Texas Instruments appears to have pivoted from building for the future to capitalizing on that investment.
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