Texas Instruments Stock Drops 4% on Chip Demand Slowdown After Tariff-Driven Surge

Texas Instruments shares tumbled nearly 4.32% after CFO Rafael Lizardi warned of weakening semiconductor demand. The decline follows a temporary surge in orders from January to April 2025, driven by customers stockpiling chips ahead of U.S. tariffs on Chinese goods. The tariffs, announced by former President Donald TRUMP on April 2, created a boom-bust cycle that left the company exposed to sudden demand shifts.

While Texas Instruments anticipated some order pull-forward, the abrupt post-tariff slowdown revealed deeper supply chain uncertainties. The company secured $1.6 billion in CHIPS Act grants—avoiding the contentious government equity stakes that entangled competitors like Intel. Capital expenditures now strain free cash flow, curtailing share buybacks and pressuring near-term returns.