Texas Instruments Inc on Tuesday provided a sales outlook that signals an inventory glut is coming to an end, reassuring investors that a revival is underway in key markets for the company’s chips.
The company’s forecast stoked optimism that orders may now be on the rise and helped counter fresh concern caused by peer NXP Semiconductors NV, which on Monday gave projections that fell well short of estimates.
Texas Instruments chief executive officer Haviv Ilan said that China, which is the largest market for semiconductors, has returned to growth after its electronics makers finished drawing down their stockpiles of unused components. Europe and Japan are still in the early phase of that process, Ilan said.
Photo: Mike Blake, Reuters
Within the company’s industrial segment, about half of the markets are still working through inventory while others have returned to increasing orders, he said.
“It was a good quarter for our China business,” Ilan said on a conference call. There were “very distinct signals that customers have worked down their inventory.”
The company projected sales in the period ending in September will be US$3.94 billion to US$4.26 billion. Analysts, on average, estimated US$4.14 billion, according to data compiled by Bloomberg.
Profit will be US$1.24 to US$1.48 a share, Texas Instruments said in a statement, compared with an average projection of US$1.38.
Still, the Dallas-based company is sticking to its policy of not predicting when the market for chips will pick up overall. The current cycle is unusual in that different areas and geographies are behaving differently, chief financial officer Rafael Lizardi said.
The projected sequential improvement in revenue during the current quarter is being driven by electronics makers preparing for the end-of-year holiday shopping season, he said.
Texas Instruments’ factories are running at closer to full capacity and inventory remains roughly flat, Lizardi said. Executives added that the company is able to fill most orders as soon as it receives them — an indication that supply and demand are roughly in balance.
Separately, Elliott Investment Management LP, which in May took a US$2.5 billion position in Texas Instruments and expressed concern about the company’s increased spending on new plants, reversed course and praised Ilan’s comments on the call.
“We appreciate the constructive dialogue that we have established with Texas Instruments, and we believe the steps announced today will support long-term value creation for all of its shareholders,” Elliott said in a statement.
In the second quarter, the company’s revenue declined 16 percent to US$3.82 billion, marking the seventh consecutive contraction. Analysts projected US$3.82 billion. Profit was US$1.22 a share, compare with an estimate of US$1.16.
Texas Instruments has the widest customer base and biggest product range among chipmakers, so the company’s results and forecasts act as an indicator of demand across a variety of industries. The majority of its chips go into industrial and automotive applications.
It is the biggest maker of analog semiconductors and embedded processors. Its products perform simple but vital functions, such as converting power to different voltages within electronics.
The company is spending heavily on new plants, an effort to bring most production back in house, but weighing down its profit in the meantime. Texas Instruments has said that effort, when complete, will give it a cost advantage over rivals. The company will continue with that plan, it said on Tuesday.
TECH BOOST: New TSMC wafer fabs in Arizona are to dramatically improve US advanced chip production, a report by market research firm TrendForce said With Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) pouring large funds into Arizona, the US is expected to see an improvement in its status to become the second-largest maker of advanced semiconductors in 2027, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report last week. TrendForce estimates the US would account for a 21 percent share in the global advanced integrated circuit (IC) production market by 2027, sharply up from the current 9 percent, as TSMC is investing US$65 billion to build three wafer fabs in Arizona, the report said. TrendForce defined the advanced chipmaking processes as the 7-nanometer process or more
China’s Huawei Technologies Co (華為) plans to start mass-producing its most advanced artificial intelligence (AI) chip in the first quarter of next year, even as it struggles to make enough chips due to US restrictions, two people familiar with the matter said. The telecoms conglomerate has sent samples of the Ascend 910C — its newest chip, meant to rival those made by US chipmaker Nvidia Corp — to some technology firms and started taking orders, the sources told Reuters. The 910C is being made by top Chinese contract chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯) on its N+2 process, but a lack
Who would not want a social media audience that grows without new content? During the three years she paused production of her short do-it-yourself (DIY) farmer’s lifestyle videos, Chinese vlogger Li Ziqi (李子柒), 34, has seen her YouTube subscribers increase to 20.2 million from about 14 million. While YouTube is banned in China, her fan base there — although not the size of YouTube’s MrBeast, who has 330 million subscribers — is close to 100 million across the country’s social media platforms Douyin (抖音), Sina Weibo (新浪微博) and Xiaohongshu (小紅書). When Li finally released new videos last week — ending what has
OPEN SCIENCE: International collaboration on math and science will persevere even if the incoming Trump administration imposes strict controls, Nvidia’s CEO said Nvidia Corp CEO Jensen Huang (黃仁勳) said on Saturday that global cooperation in technology would continue even if the incoming US administration imposes stricter export controls on advanced computing products. US president-elect Donald Trump, in his first term in office, imposed restrictions on the sale of US technology to China citing national security — a policy continued under US President Joe Biden. The curbs forced Nvidia, the world’s leading maker of chips used for artificial intelligence (AI) applications, to change its product lineup in China. The US chipmaking giant last week reported record-high quarterly revenue on the back of strong AI chip
RSS