UBS: Analog chip inventory down 10%, cycle continues upward, Texas Instruments top pick

UBS estimates that given strong demand, tight supply, rising prices, and low distributor inventories, the analog semiconductor cycle still has further upside. TXN's finished goods inventory stands at 75 days, above the industry average of 39 days, making it a top pick due to its inventory positioning, potential for market share recovery, and free cash flow inflection point; Analog Devices (ADI) is expected to report Q3 revenue growth of 8.5% sequentially, exceeding the seasonal baseline of 4.6%, with earnings expectations equally favorable.