Taking the Pulse at Texas Instruments

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Will you supply any components to the iPhone?
Apple is a good customer of ours, and they also like us to be very private about who supplies what.

Who are Texas Instruments' biggest customers?
Nokia is still the largest. We only disclose the ones that amount to larger than 10%, but there are companies like Motorola that have a chance of becoming very large as well, so we end up with a pretty broad range of large customers.

Much of the buzz right now is around VoIP. Having already disrupted the traditional telecom business, it's now poised to start affecting the wireless business, which goes squarely to what your customers have to think about. What affect is VoIP having on your business?
TI is probably the largest supplier to VoIP, whether it's to phones or things that no one ever sees, like the gateways. A lot of the operators want to take their voice traffic off the old TDM lines so they will have gateways as close to the edge of the network as they can get. We love that because conversion of the old lines to VoIP is all about signal processing, which means farms of DSP chips. Keep an eye on the cable companies switching large areas of neighborhoods and offering voice along with TV and Internet. We've got a lot of the voice processing that goes into the cable modems. So there's a lot of interesting dimensions to VoIP, many of which the consumer never sees. That's going to continue. And stay tuned for VoIP in the wireless domain. What people are talking about on 4G [fourth-generation] networks is treating the network as a bit pipe and turning voice into just another application on the phone.

What business should Texas Instruments be in that it's not in yet?
If there is one thing we're saying right now is that analog has become an even more important opportunity than before. There's a lot of growth potential that we can still find. And it doesn't make the front page of an annual report, and it's not this big single killer application. It's just a very large, very diversified, very good opportunity. But we're beginning to see a lot of emerging and new opportunities in the same way that semiconductors have revolutionized computing and communications. Think about the medical industry. It's about 15% of the GDP in the U.S., but the impact of semiconductors in medicine is near zero.

In what way?
Take diagnostics and laboratory equipment or ultrasounds. We have customers who have developed ultrasounds in a 10- by 12-inch portable package so you can get it closer to the patient. Then there's high-end medical imaging. Doctors want almost HDTV-quality images because they want to do image-assisted surgery. Think about the opportunities for DSP and analog parts inside that equipment. Then there's handheld devices like glucometers that help check and measure daily insulin levels for people with diabetes. The opportunity for that is going to do nothing but grow.

Who are you working with on these ideas?
I'd guess we have 8 to 10 people from different product areas that are gathered up into a medical team. Plus, I have a smaller group that I get together with a few times a year to try to understand where we're going. We've had those groups at a half-dozen medical schools and bioengineering schools. We want to get a snapshot about the tough and gnarly problems they're looking at 5 and 10 years down the road. We're staying closely connected with a lot of the smaller customers, very innovative companies, a lot of them not public. Few even make it public because they get acquired before they get to that point.

Do you see yourself making acquisitions in this area? Or is it too soon to say?
It's too soon to say. You've watched us in the DSP and analog world make smaller acquisitions because we really respect very targeted teams that have deep and specific knowledge, so we're not afraid to do something along those lines.