Seaport Research upgraded Texas Instruments to Buy from Neutral on Friday and established a $400 price target, saying a structural reworking of how data centers distribute power should materially increase demand for power analog semiconductors over the coming years.
Analyst Jay Goldberg frames the change as a response to growing power needs and higher electrical intensity per rack. Those trends, he wrote, are nudging data centers away from traditional 480-volt architectures toward 800-volt DC systems, which offer improved transmission efficiency compared with older configurations.
Seaport's note argues that the shift to higher-voltage architectures will expand the total addressable market for power analog semiconductors from roughly $5 billion today to about $15 billion by 2030. The firm also says the re-architecture should lift the category's margin profile.
Within that context, Seaport contends Texas Instruments is well positioned to capture an outsized share of the opportunity. The research house cites the company's wide-ranging power semiconductor portfolio and a strong gallium nitride platform as competitive advantages that should help it benefit as data centers redesign their power infrastructure.
Seaport expects the improvement in Texas Instruments' data center segment to play out over multiple quarters and to contribute positively to earnings. The firm noted, however, that widespread volume deployments of 800-volt data center designs are not projected until 2028, although initial construction activity is anticipated next year. Because design choices are already being made this year, Seaport expects supply chain signals and vendor announcements to appear well before the change shows up in full on the income statement.
Beyond Texas Instruments, Seaport highlighted several other firms as potential beneficiaries. Infineon was singled out for having some of the stronger silicon carbide and gallium nitride product offerings, while Navitas and Wolfspeed were described as companies that are highly leveraged to GaN and SiC, respectively.
The firm also noted the transition is expected to begin with Nvidia's Kyber racks, which Seaport said are expected to enter volume shipments late next year.
Summary
Seaport Research upgraded Texas Instruments to Buy, set a $400 price target, and identified a move to 800-volt DC data center power architectures as a catalyst that could expand the power analog semiconductor market to $15 billion by 2030. The firm sees Texas Instruments' product breadth and gallium nitride platform as positioning it to capture significant upside, and expects multi-quarter data center segment improvement to support earnings growth. Infineon, Navitas and Wolfspeed are also noted as potential winners.
Key Points
- Seaport upgraded Texas Instruments to Buy and set a $400 price target.
- The analyst argues data centers are trending to 800-volt DC systems from 480-volt systems, increasing the total addressable market for power analog semiconductors from about $5 billion today to $15 billion by 2030 and improving category margins.
- Other firms identified as potential beneficiaries include Infineon, Navitas and Wolfspeed; Nvidia's Kyber racks are expected to begin volume shipments late next year and could kick off the transition.
Risks and Uncertainties
- Timing risk - Seaport notes volume deployments of 800-volt data centers are not expected until 2028, meaning the full financial effects may be several years away and depend on execution and adoption schedules.
- Early-stage uncertainty - While initial builds are anticipated next year and design decisions are occurring this year, the note indicates that supply chain signals and vendor announcements are likely to precede any sizable earnings impact, creating a gap between signaling and revenue realization.
- Concentration of benefit - Seaport highlights a small group of vendors as likely beneficiaries; sector outcomes will depend on how product portfolios and platform strengths translate into design wins across the industry.