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TI's small loss shows communications IC market is recovering

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CIOL Bureau
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In a sign the market for communications chips has stabilized, if not returned

to some growth, Texas Instruments said its first quarter loss was much smaller

than anticipated and sales were starting to pick up as equipment makers restock

after a year of cutting inventories.

TI lost $38 million compared with a profit of $230 million a year ago. Sales

tumbled to $1.83 billion from $2.53 billion, but that was slightly higher than

earlier expectations on Wall Street. And second quarter sales are now expected

to further increase to $2.1 billion. "I'd say as an example, our wireless

customers themselves are all predicting they will have unit growth in their

business this year," said chief financial officer Bill Aylesworth said in

an interview. "We think we have enough visibility for the second quarter.

An estimated 420 million cellular handsets are expected to be shipped this

year, up from about 380 million last year. "We have turned the corner

toward growth," said TI CEO Tom Engibous. "TI's shipments, affected by

liquidation of excess inventory in 2001, are accelerating as they catch up to

the rate of our customers' shipments. Growth will be driven by improvements in

our customers' end-equipment markets. The key driver for improvement will be a

stronger economy, which will lead to more normal levels of global corporate

spending."

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