10:19 AM EDT, 05/28/2024 (MT Newswires) -- (Updates with additional details throughout, MT Newswires' attempt to reach Texas Instruments ( TXN ) in last paragraph.)

Elliott Investment Management has made a $2.5 billion investment in Texas Instruments ( TXN ) and is urging the company to improve its free cash flow, the activist hedge fund said Tuesday.

Elliott said it has sent a letter to the board of Texas Instruments ( TXN ) and is asking the company to "adopt a dynamic capacity-management strategy and introduce a free cash flow per share target of $9.00+ in 2026."

Texas Instruments' ( TXN ) "shareholder returns have lagged peers consistently over a multiyear period," the hedge fund said in the letter.

"Our diagnosis is simple: Investors are concerned that TI appears to have deviated from its longstanding commitment to drive growth of free cash flow per share," Elliott said.

Elliott added it believes "in the strategic merit of American semiconductor manufacturing leadership" and that Texas Instruments ( TXN ) is "the only analog company with proven industry leadership and proven technology to achieve this goal at scale."

Texas Instruments ( TXN ) didn't immediately respond to a request for comment by MT Newswires.

Shares of Texas Instruments ( TXN ) shares were rising 0.2% in recent trading.

Price: 199.65, Change: +0.47, Percent Change: +0.23