(Reuters) -Activist investor Elliott Investment Management disclosed a $2.5 billion stake in analog chipmaker Texas Instruments and urged the chipmaker to improve its free cash flow.

Texas Instrument’s shares rose about 3% in early trading.

Elliott proposed in a letter to the company’s board that Texas Instruments introduce a “dynamic capacity-management strategy”, which would allow it to achieve free cash flow of as much as $9 a share by 2026.

The company’s free cash flow fell 77% to $1.47 per share in 2023, according to LSEG data.

(Reporting by Akash Sriram in Bengaluru; Editing by Shinjini Ganguli and Shailesh Kuber)