Texas Instruments (NYSE:TXN) has remained the market leader in analog semiconductors with a market share that touched 18% in 2010 by our estimates. Analog semiconductors are used for manipulating and converting real-world signals such as sound, temperature, pressure or images to a stream of digital data. TI faces competition in this space from Qualcomm (NASDAQ:QCOM), Broadcom (NASDAQ:BRCM), Renesas, ST-Ericsson and Analog Devices (NYSE:ADI), and we believe it’ll continue to increase its market share based on its superior products and strong sales in products like voltage regulators. Moreover, the National Semiconductor (NYSE:NSM) acquisition will strengthen TI’s analog portfolio and help regain lost market share over the past few years.

While we estimate Texas Instruments’ market share in global analog semiconductors will increase to around 20.5% by the end of our forecast period, Trefis members predict an increase 19% to around 22% during the same period. The member estimates imply a modest 5% upside to the Trefis price estimate for TXN stock. You can modify the chart below to see how your forecast would impact the price estimate.

We currently have a Trefis price estimate of $35.70 for Texas Instruments’s stock, about 40% above the current market price. See our Texas Instruments launch article here.

Fast Growth Expected in Voltage Regulators

According to iSuppli, voltage regulators revenue in 2010 are expected to grow at a CAGR of 16% from 2009 to 2015 compared to the overall analog CAGR of 6.3%. Voltage regulators accounted for about 1.7 billion of $5.9 billion of TI’s overall revenues.^[1]

TI is the market leader in voltage regulators with a market share of 18% in 2010. Going forward, we expect TI to retain its market leadership and grow its presence in a faster growing market, thereby enabling it to increase its overall analog market share.

National Semiconductor Acquisition Strengthens Analog Portfolio

National’s strength in power management, amplifiers, and interface chips nicely complements TI’s existing portfolio of high-performance analog products. While TI had the highest market share in voltage regulators in 2010, National held the 3rd position with a share of 8.3% or $758 million in revenue. Combined, TI would have almost $2.5 billion in revenue from voltage regulators alone. Moreover, these products could have cost synergies, which would benefit TI.

Additionally, TI and National have almost similar line of products but different end markets. While National’s high voltage power management products are well suited for industrial power applications, TI’s power management product offerings are used in portable devices. National has low speed, high resolution data converters while TI has high speed and high resolution. This means National will open up newer markets for TI and its products.

Our complete analysis for Texas Instruments’s stock is here.

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