A great example is the switch from Internal Combustion Engine (ICE) Vehicles to Electric Vehicles (EV). Most emerging technology trends require semiconductors and all of them need to collect data. This is especially a large differentiator to digital chips like the newest Advanced Micro Devices ( AMD) Ryzen CPUs or Nvidia GeForce GPU which cost hundreds if not thousands of dollars. Furthermore, they often cost a fraction of the production cost of the good but are needed in large quantities. These processes can't be digitalized away and the products have long lifespans. These chips have use cases like changes in power, chips that measure signal changes, sensors that convert real-life signals into digital signals like the temperature or basically every time a button is pushed. That is where analog and embedded processors take the stage. Digital chips are highly complex chips that are very efficient at processing data, but they cannot collect data.
So why invest in analog chips, when that clearly is going out of fashion? That's where many people get the market wrong. "The world is going digital" is something we hear almost every day. An Overlooked Growth Market In A Digital World In the following article, I will mainly refer to Texas Instruments as TI. I believe Texas Instruments is a buy right now, and here's why it represents my second-largest position (8% allocation) in my portfolio. Both segments are overlooked with most eyes on digital chips and players like Intel ( INTC ), Nvidia ( NVDA ) and Taiwan Semiconductor Manufacturing Company ( TSM ). The company is the market leader in analog semiconductors and a market leader in the embedded semiconductor market.
Texas Instruments ( NASDAQ: TXN) is a well-run company with a strong competitive advantage and industry tailwinds and should be able to achieve 10-15% total annual returns for investors over the next decade. PonyWang/E+ via Getty Images Investment Thesis