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No. of Recommendations: 1
Hi,Geof,
Thanks for your work on TXN back in April, 2000(post# 6255). I was particularly interested in your list of 3 of TXN's competitors : MOT, ADI, LSI.

I have been looking for competitors for days now, and it was good to see them in your post. How and where did you find them? I have read a lot on the TXN web site, but have only learned that there are competitors..but not who they are.

I am looking to own this company. Its long term prospects look very good to me. Their market share in DSP and analog devices is impressive, but that they are making the chips that are going into more and more products seems like an even better reason to get involved with them. However, I am concerned about their lack of free cash flow as of 9 months ended 9/30/00.

Operating cash flow $1,530
Capital expenditures $1,789
Free cash flow $ (259)

I was unable to find out just what they are spending this money on, but I suspect that it is on expanding their capacity to build DSP's and the like. Have you heard any news about these expenditures?

In the 1999 10-K, Thomas Engibous forecasted that TI would increase mfg. capacity to $2.0 billion in 2000, so the 1.8 above seems about right on target. I just would like to know more about the capex than the CEO's remarks. Any ideas? The quote below is from Mr. Engibous.(http://www.ti.com/corp/docs/investor/ar99/p02.htm)

TI also made substantial investments in manufacturing capacity during 1999. We increased our capital spending budget twice during the year - to a total of $1.4 billion - to focus on technology and capacity for TI's core areas of DSP and analog. In 2000, our capital expenditures are forecasted to be $2.0 billion. Research and Development is expected to be $1.5 billion versus $1.3 billion pro forma in 1999, primarily for DSP and analog. This year we will equip our newest fabrication facility in Dallas (known as DMOS 6) with advanced 300-millimeter equipment with production expected to begin in the second half of 2001. The completion of DMOS 6 and other technology upgrades will help to ensure that we have capacity in place to meet the expected demand for our chips, while providing greater efficiencies in production that should reach our bottom line.

Frank Dwelley..
waiting for the next quarter numbers on TXN



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