Texas Instruments Incorporated (NASDAQ:TXN) Q4 2022 Earnings Call Transcript

Dave Pahl: Yes. Joshua, maybe just quickly, obviously, when customers begin reducing inventory, its number one quarter phenomenon. It usually takes several quarters for that to happen. We won’t have a sight and it obviously will also depend on what happens to their end demand, which we can’t predict. And €“ but yes, we do believe that we get better visibility because we do have more direct relationships with customers overall, so you have a follow on?

Joshua Buchalter: Yes. Thank you. You know, a lot of attention gets paid to your CapEx for obvious reasons, but R&D grew I think 7% or 8% in 2022 after being flat for a few years. And I think you guys fair or unfair get dinged for under-investing on the R&D lines. So I was wondering could you walk through some of your priorities for that spending and how should we think about R&D into 2023? Recognize it might be a question for next week. Thank you.

Rafael Lizardi: Sure. No, I’m happy to address that. So first, these are long-term investments in nature. The R&D, clearly that’s where we get the, continue to build on the broad portfolio. That’s where we have process technology and that we get results over many, many years into the future. And we’re going to protect those investments. But it’s not just R&D, even in SG&A we have areas that are tied to capabilities. TI.com is the best example. That’s another place where we’re investing, and that’s tied to a long-term top line growth of the company to be strengthening the reach of channels advantage, you could add CapEx to that picture. That’s also obviously a long-term investment to strengthen our manufacturing and technology advantage.

If you look at the, over the last four or five years, our OpEx, so R&D and SG&A, they’ve been at a very steady $3.2 billion for like four or five years. This year for the first time, we picked that up to $3.4 billion. So we went up a little bit as we increased investments. And actually that was an impact on due to inflation, which we’re not immune to that, you can expect that to continue increasing a little bit over the, in 2023 and over the next several years as we continue to increase investments. There’s also the inflation component and but big picture, those are great long-term investments that will feel the growth for the company over the next 10 to 15 years.

Dave Pahl: Okay. Thank you, Joshua. And thank you all for joining us. Again, we look forward to sharing with you our capital management update next Thursday, February 2nd, at 10:00 AM Central Time. And a replay of this call will be available shortly on our website. Good evening.

Operator: That does conclude today’s conference. Thank you all for your participation. You may now disconnect.