• Total TI, $3.40 billion to $3.68 billion;
• Semiconductor, $3.33 billion to $3.59 billion; and
• Education Technology, $70 million to $90 million.

TI expects earnings per share to be in the range of $0.48 to $0.54.

In 2007, TI continues to expect R&D expense of about $2.2 billion and depreciation of about $1.0 billion. TI now expects an annual effective tax rate of about 29 percent compared with the prior expectation of 28 percent, and capital expenditures of about $0.7 billion compared with the prior expectation of $0.9 billion.

               TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
                      Consolidated Statements of Income
          (Millions of dollars, except share and per-share amounts)

                                                   For Three Months Ended
                                                Sept. 30,  June 30,  Sept. 30,
                                                  2007       2007      2006

    Net revenue                                 $ 3,663    $ 3,424   $ 3,761
    Cost of revenue (COR)                         1,679      1,640     1,829
    Gross profit                                  1,984      1,784     1,932
    Research and development (R&D)                  542        551       570
    Selling, general and administrative (SG&A)      429        424       432
      Total operating costs and expenses          2,650      2,615     2,831
    Profit from operations                        1,013        809       930
    Other income (expense) net                       53         56        54
    Income from continuing operations before
     income taxes                                 1,066        865       984
    Provision for income taxes                      308        251       298
    Income from continuing operations               758        614       686
    Income (loss) from discontinued operations,
     net of income taxes                             18         (4)       16
    Net income                                  $   776    $   610   $   702

    Basic earnings per common share:
      Income from continuing operations         $   .54    $   .43   $   .46
      Net income                                $   .55    $   .42   $   .47

    Diluted earnings per common share:
      Income from continuing operations         $   .52    $   .42   $   .45
      Net income                                $   .54    $   .42   $   .46

    Average shares outstanding (millions):
      Basic                                       1,417      1,437     1,506
      Diluted                                     1,448      1,469     1,537
    Cash dividends declared per share of common
     stock                                      $   .08    $   .08   $   .03

    Percentage of revenue:

    Gross profit                                   54.2%      52.1%     51.4%
    R&D                                            14.8%      16.1%     15.2%
    SG&A                                           11.7%      12.4%     11.5%
    Operating profit                               27.6%      23.6%     24.7%



               TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
                         Consolidated Balance Sheets
                 (Millions of dollars, except share amounts)

                                                 Sept. 30, June 30,  Sept. 30,
                                                   2007      2007      2006
    Assets
    Current assets:
      Cash and cash equivalents                 $    807  $  1,266  $  1,430
      Short-term investments                       2,862     2,315     2,754
      Accounts receivable, net of allowances
       of ($30), ($27) and ($29)                   2,023     1,897     2,089
      Raw materials                                  102       106       117
      Work in process                                934       876       946
      Finished goods                                 414       442       428
      Inventories                                  1,450     1,424     1,491
      Deferred income taxes                          702     1,072       666
      Prepaid expenses and other current assets      209       246       191
      Total current assets                         8,053     8,220     8,621
    Property, plant and equipment at cost          7,597     7,657     7,890
      Less accumulated depreciation               (3,916)   (3,859)   (3,901)
      Property, plant and equipment, net           3,681     3,798     3,989
    Equity and other long-term investments           265       254       270
    Goodwill                                         796       792       792
    Acquisition-related intangibles                  108       117       131
    Deferred income taxes                            425       405       411
    Capitalized software licenses, net               242       259       175
    Overfunded retirement plans                       77        79        --
    Prepaid retirement costs                          --        --       308
    Other assets                                      77        96        88
    Total assets                                $ 13,724  $ 14,020  $ 14,785

    Liabilities and Stockholders' Equity
    Current liabilities:
      Loans payable and current portion of
       long-term debt                           $    --   $     --  $     43
      Accounts payable                               644       622       744
      Accrued expenses and other liabilities       1,092     1,048     1,066
      Income taxes payable                           152       187       458
      Accrued profit sharing and retirement          143        98       118
      Total current liabilities                    2,031     1,955     2,429
    Underfunded retirement plans                      95       115        --
    Accrued retirement costs                          --        --        67
    Deferred income taxes                             27        20        14
    Deferred credits and other liabilities           434       436       248
    Total liabilities                              2,587     2,526     2,758

    Stockholders' equity:
      Preferred stock, $25 par value.
       Authorized -- 10,000,000 shares.
        Participating cumulative preferred.
         None issued                                  --        --        --
      Common stock, $1 par value. Authorized --
       2,400,000,000 shares.
        Shares issued: Sept. 30, 2007 --
         1,739,579,782; June 30, 2007 --
         1,739,467,307; Sept. 30, 2006 --
         1,739,102,544                             1,740     1,739     1,739
      Paid-in capital                                853       761       820
      Retained earnings                           19,172    18,511    16,927
      Less treasury common stock at cost.
        Shares:  Sept. 30, 2007 -- 341,373,012;
         June 30, 2007 -- 310,382,046;
         Sept. 30, 2006 -- 255,218,212           (10,344)   (9,233)   (7,413)
      Accumulated other comprehensive income
       (loss), net of tax                           (284)     (284)      (46)
      Total stockholders' equity                  11,137    11,494    12,027
    Total liabilities and stockholders' equity  $ 13,724  $ 14,020  $ 14,785



               TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                            (Millions of dollars)

                                                    For Three Months Ended
                                                  Sept. 30, June 30, Sept. 30,
                                                     2007     2007     2006
    Cash flows from operating activities:
      Net income                                  $   776  $   610  $   702
      Adjustments to reconcile net income to
       cash provided by operating activities
       of continuing operations:
        (Income) loss from discontinued operations    (18)       4      (16)
        Depreciation                                  262      256      266
        Stock-based compensation                       66       69       79
        Amortization of capitalized software           24       24       26
        Amortization of acquisition-related
         intangibles                                   10       14       15
        (Gains) losses on sales of assets             (39)      --       --
        Deferred income taxes                          36       (3)     (46)
      Increase (decrease) from changes in:
        Accounts receivable                          (117)    (144)    (149)
        Inventories                                   (34)     (15)    (156)
        Prepaid expenses and other current assets      24       42        4
        Accounts payable and accrued expenses         154      110       81
        Income taxes payable                          378     (132)    (377)
        Accrued profit sharing and retirement          45       47       41
      Change in funded status of retirement
       plans and accrued retirement costs             (14)      --      (65)
      Other                                           (22)      16       21
    Net cash provided by operating
     activities of continuing operations            1,531      898      426

    Cash flows from investing activities:
      Additions to property, plant and
       equipment                                     (152)    (174)    (276)
      Proceeds from sales of assets                    61       --       --
      Purchases of cash investments                (1,916)  (1,479)  (1,330)
      Sales and maturities of cash investments      1,374    1,529    2,585
      Purchases of equity investments                 (15)      (6)     (11)
      Sales of equity and other long-term
       investments                                      4        3       --
      Acquisitions, net of cash acquired               (4)      --       --
    Net cash provided by (used in) investing
     activities of continuing operations             (648)    (127)     968

    Cash flows from financing activities:
      Payments on loans and long-term debt             --      (43)      --
      Dividends paid                                 (114)    (115)     (46)
      Sales and other common stock transactions       166      374       82
      Excess tax benefit from stock option
       exercises                                       16       56       21
      Stock repurchases                            (1,409)    (742)  (1,695)
    Net cash used in financing activities of
     continuing operations                         (1,341)    (470)  (1,638)
    Effect of exchange rate changes on cash            (1)      --       (4)
    Net increase (decrease) in cash and cash
     equivalents                                     (459)     301     (248)
    Cash and cash equivalents, beginning of
     period                                         1,266      965    1,678
    Cash and cash equivalents, end of period      $   807  $ 1,266  $ 1,430

Certain amounts in the prior periods' financial statements have been reclassified to conform to the current presentation.

                             Segment Net Revenue
                            (Millions of dollars)

                                                  For Three Months Ended
                                             Sept. 30,   June 30,    Sept. 30,
                                               2007        2007        2006

    Semiconductor                            $ 3,461     $ 3,257     $ 3,579
    Education Technology                         202         167         182

    Total net revenue                        $ 3,663     $ 3,424     $ 3,761



                            Segment Profit (Loss)
                            (Millions of dollars)

                                                  For Three Months Ended
                                              Sept. 30,   June 30,   Sept. 30,
                                                2007        2007        2006

    Semiconductor                            $ 1,031     $   905     $ 1,008
    Education Technology                          99          74          83
    Corporate*                                  (117)       (170)       (161)

    Profit from operations                   $ 1,013     $   809     $   930


    *  Corporate includes a gain on the sale of the company's semiconductor
       product line for broadband DSL customer-premises equipment of $39 in
       the third quarter of 2007 in cost of revenue.  Corporate also includes
       the following stock-based compensation expense:

    COR                                      $    12     $    13     $    15
    R&D                                           20          21          24
    SG&A                                          34          35          40
    Profit from operations                   $    66     $    69     $    79

Semiconductor

• Revenue in the third quarter was $3.46 billion. This was an increase of 6 percent from the prior quarter primarily due to higher demand for analog products, as well as for DSP products used in cell phone applications. Compared with a year ago, revenue decreased 3 percent as higher analog product revenue was more than offset by declines across a broad base of other products.
  • Analog product revenue of $1.40 billion was up 10 percent from the prior quarter primarily due to increased demand for high-performance analog products, as well as a broad range of analog products used in other applications, especially storage devices. Compared with the year-ago quarter, analog revenue increased 2 percent due to gains in high-performance analog. Revenue from high-performance analog products increased 13 percent from the prior quarter and 10 percent from a year ago.
  • DSP product revenue of $1.31 billion was up 6 percent from the prior quarter primarily due to higher demand for products used in cell phone applications. DSP product revenue declined 4 percent from a year ago primarily due to products used in wireless network infrastructure and cell phone applications.
• TI’s remaining Semiconductor revenue of $751 million was about even with the prior quarter as growth in microcontroller, standard logic and RISC microprocessor product revenue offset a decline in DLP® product revenue. Royalties also grew on a sequential basis. TI’s remaining Semiconductor revenue decreased 10 percent from the year-ago quarter primarily due to declines in DLP, RISC microprocessor and standard logic product revenue, while royalties and microcontroller product revenue grew compared with the year-ago quarter.
• Gross profit was $1.84 billion, or 53.2 percent of revenue. This was an increase of $132 million from the prior quarter primarily due to higher revenue. Compared with the year-ago quarter, gross profit was about even primarily due to reduced manufacturing costs, which offset the impact of lower revenue.
• Operating profit was $1.03 billion, or 29.8 percent of revenue. This was an increase of $126 million from the prior quarter due to higher gross profit. It was an increase of $23 million from the year-ago quarter due to lower R&D expense.
• Semiconductor orders were $3.44 billion. This was an increase of 6 percent from the prior quarter and 4 percent from the year-ago quarter primarily due to higher demand for analog and DSP products.

Semiconductor Highlights

• TI introduced the industry's lowest power zero-crossover operational amplifier. This high-performance analog product’s unique architecture improves performance and simplifies designs in battery-powered, portable applications.
• TI launched a new, low-cost DaVinci™ processor that doubles the battery life of portable, high-definition video products such as digital cameras and IP video security cameras.
• TI introduced a power management battery fuel gauge chip that predicts battery life with 99 percent accuracy in smartphones and other handheld devices.

Education Technology

• Revenue in the third quarter was $202 million. This was an increase of $35 million from the prior quarter as retailers purchased calculators for the back-to-school season. It was an increase of $20 million from the year-ago quarter as some major retailers shifted calculator purchases from the second into the third quarter in order to be closer to the start of the school year.
• Gross profit was $136 million, or a record 67.1 percent of revenue. This was up $27 million from the prior quarter and $20 million from the year-ago quarter due to higher revenue.
• Operating profit was $99 million, or a record 49.1 percent of revenue. This was an increase of $25 million compared with the prior quarter and $16 million compared with the year-ago quarter due to higher gross profit.

# # #

Safe Harbor Statement
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words or phrases of similar import. Similarly, statements in this release that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or its management:

• Market demand for semiconductors, particularly for analog chips and digital signal processors in key markets such as communications, entertainment electronics and computing;
• TI’s ability to maintain or improve profit margins, including its ability to utilize its manufacturing facilities at sufficient levels to cover its fixed operating costs, in an intensely competitive and cyclical industry;
• TI’s ability to develop, manufacture and market innovative products in a rapidly changing technological environment;
• TI’s ability to compete in products and prices in an intensely competitive industry;
• TI’s ability to maintain and enforce a strong intellectual property portfolio and obtain needed licenses from third parties;
• Expiration of license agreements between TI and its patent licensees, and market conditions reducing royalty payments to TI;
• Economic, social and political conditions in the countries in which TI, its customers or its suppliers operate, including security risks, health conditions, possible disruptions in transportation networks and fluctuations in foreign currency exchange rates;
• Natural events such as severe weather and earthquakes in the locations in which TI, its customers or its suppliers operate;
• Availability and cost of raw materials, utilities, manufacturing equipment, third-party manufacturing services and manufacturing technology;
• Changes in the tax rate applicable to TI as the result of changes in tax law, the jurisdictions in which profits are determined to be earned and taxed, the outcome of tax audits and the ability to realize deferred tax assets;
• Losses or curtailments of purchases from key customers and the timing and amount of distributor and other customer inventory adjustments;
• Customer demand that differs from company forecasts;
• The financial impact of inadequate or excess TI inventories to meet demand that differs from projections;
• Product liability or warranty claims, or recalls by TI customers for a product containing a TI part;
• TI’s ability to recruit and retain skilled personnel; and
• Timely implementation of new manufacturing technologies, installation of manufacturing equipment and the ability to obtain needed third-party foundry and assembly/test subcontract services.

For a more detailed discussion of these factors, see the text under the heading “Risk Factors” in Item 1A of our most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of publication, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances.

About Texas Instruments
Texas Instruments Incorporated provides innovative DSP and analog technologies to meet our customers’ real world signal processing requirements. In addition to Semiconductor, the company includes the Education Technology business. TI is headquartered in Dallas, Texas, and has manufacturing, design or sales operations in more than 25 countries.

Texas Instruments is traded on the New York Stock Exchange under the symbol TXN. More information is located on the World Wide Web at www.ti.com.

TI Trademarks:
DLP
DaVinci

Other trademarks are the property of their respective owners.

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