Texas Instruments Inc’s shares declined the most in nearly five years on Friday after the chipmaker gave a disappointing earnings forecast for the current period, hurt by still-sluggish demand and higher manufacturing costs.
Profit will be US$0.94 to US$1.16 a share in the first quarter, the company said in a statement on Thursday. The midpoint of that range, US$1.05 a share, was well below the US$1.17 that analysts projected on average.
Much of the electronics industry remains mired in a slump — contributing to nine consecutive quarters of sales declines at the company.
Photo: Bloomberg
Manufacturing expenses also have affected profit, Texas Instruments executives said.
Texas Instruments gets the biggest portion of its sales from manufacturers of industrial equipment and vehicles, making its projections a bellwether for much of the global economy.
Three months ago, executives said some of the company’s end markets were showing signs of emerging from an inventory glut, but the rebound has not come as quickly as some investors anticipated.
The company’s shares fell 7.5 percent to US$185.52 in New York on Friday. That wiped out the stock’s entire gain this year and marked the worst single-day rout since the early days of the COVID-19 pandemic in March 2020.
Texas Instruments CEO Haviv Ilan on a conference call with analysts on Thursday said that industrial demand remains slow.
“Industrial automation and energy infrastructure still haven’t found the bottom,” he said.
In the automotive segment, growth in China was not as strong as it has been, meaning it cannot offset the expected weakness in other parts of the world.
“We haven’t seen the bottom yet — let me be clear,” Ilan said, although the company is seeing “points of strength.”
Sales would be US$3.74 billion to US$4.06 billion in the first quarter, Texas Instruments said, compared with an estimate of US$3.86 billion.
In contrast with the disappointing forecast, December quarter results handily beat analysts’ estimates. Although sales fell 1.7 percent to US$4.01 billion, analysts had projected US$3.86 billion. Profit was US$1.30 a share, compared with a prediction of US$1.21 per share.
Texas Instruments is the biggest maker of chips that perform simple but vital functions in a broad range of electronic devices. It is also the first large US chipmaker to report numbers in the current earnings season.
Chipmakers in other parts of the world have offered a mixed picture of demand for their products. Taiwan Semiconductor Manufacturing Co (台積電), Samsung Electronics Co and SK Hynix Inc have pointed to continuing strength in data center products — helped by the artificial intelligence boom. However, overall growth is still hampered by downturns in other markets, such as smartphones and personal computers.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS