In January 1951, Texas-based company Geophysical Service Incorporated underwent a restructuring program.
The company, which developed sophisticated equipment used for surveying in the seismic industry, was formally renamed as Texas Instruments (TI), creating what would become a tech industry behemoth.
TI boasts a jaw-dropping list of accolades and accomplishments. In 1954, it created the world’s first commercial silicon transistor, building on the pioneering work of Bell Labs. That same year, the company designed and launched the Regency TR-1, the first commercially manufactured transistor radio.
Impressed yet? There’s more. Four years later in 1958, TI invented the integrated circuit while 1967 saw the creation of the hand-held calculator. The mid-1970s saw big leaps in the digital wristwatch industry with the introduction of an LED watch under $20.
The list goes on, and to be honest it would be exhausting listing them all off.
In 2026, TI remains a major player in the semiconductor industry, ranking among the top 10 producers globally based on sales. But while it’s still alive and kicking, it’s safe to say the company has had a few bumps along the road.
One of these, which transpired in the 1980s, was described as a ‘Black Monday’ type catastrophe for the company – but it was several years’ worth of Mondays.
The great TI-99/4A price war
In the late 1970s, the fledgling personal computing market was booming and Texas Instruments was among a string of companies at the forefront of this revolution.
Already a highly successful electronics manufacturer, TI wanted a piece of the pie, butting heads with IBM, Apple, and Tandy Corporation with its iconic TRS-80 device.
Its first major launch in this domain came in 1979 with the release of the TI-99/4, which by all accounts performed well. Its second updated version in 1981, the 99/4A, was primed to be a monumental hit, and to some extent it was.
The 99/4A boasted a simplified design compared to its predecessor, a full-travel keyboard, and improved graphics capabilities. It was also significantly cheaper than the original model – half the cost, to be precise.
Naturally, this all created a big draw for consumers. But a confluence of issues created a spiralling situation that cost the company dearly. First and foremost, the device suffered from a chronic lack of software availability, which severely impeded users.
Market conditions were also fierce, and TI found itself in a serious price war with competitors.
Notably, the 99/4A was released shortly before the Commodore VIC-20. The latter immediately pursued an aggressive strategy to claw customers away from TI by lowering the price, thereby forcing TI to follow suit.
This war raged on for months and by late 1982 TI was shipping a whopping 5,000 devices from its Lubbock factory in Texas. Within the space of a year it was selling the device at a significant loss for just under $100.
According to archived reports from TexasMonthly, in two quarters across 1983 the 99/4A cost TI a staggering $400 million in losses. July that year saw the company post its first quarterly loss in its history and its stock dropped 29 points.
In a 2017 op-ed for IEEE Spectrum, Walden C “Wally” Rhines, who served as the executive VP of TI’s semiconductor group, said the company “eventually sold 2.8 million units, most of them at a significant loss”.
The impact of this price war on TI was immense. In October 1983 the company discontinued the 99/4A and production officially ceased in March 1984.
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