(Reuters) -Texas Instruments Inc on Tuesday forecast current-quarter revenue above expectations and said it would sharpen its focus on chips used in the lucrative automotive and industrial sectors, sending its shares up 4% in extended trading.
The company, which also beat fourth-quarter revenue estimates, is boosting capacity as chipmakers try to plug the gap between demand and supply caused by the pandemic-fueled supply delays and a shift to working and learning from home.
Texas Instruments (NASDAQ:TXN) now plans to bank on opportunities and place "additional strategic emphasis" on the industrial and automotive segments, which roughly account for 41% and 21% of the company's annual revenue.
"It's very easily seen in the automotive market that there's content growth. We can see the cars today just have more semi content in them per vehicle than what we drove 5 years ago and 10 years ago. And it's very clear that that's going to continue," TI's head of investor relations David Pahl said in a call with analysts.
Customers in these two segments are turning to analog and embedded technology to make their end-products smarter and more efficient, which will drive faster growth in chip demand to these segments, he added.
The company in November announced plans to set up 300 millimeter wafer fabrication plants in Sherman, Texas, which will complement its two other units in the city and a third it bought in Utah.
Texas Instruments forecast first-quarter revenue between $4.5 billion and $4.9 billion, compared to analysts' expectations of $4.37 billion, according to IBES data from Refinitiv.
The company makes analog and embedded processing chips that are used in products that cater to a broad market, lowering its reliance on a single customer segment.
Fourth-quarter revenue rose 19% to $4.83 billion, topping estimates of $4.43 billion.
Net income of $2.27 per share also beat expectations of $1.94.