Chip demand recovering-Texas Instruments chief
Wednesday September 17, 1:33 pm ET
By Jim Christie
(Updates with background, share price; adds byline)
SAN FRANCISCO, Sept 17 (Reuters) - Texas Instruments Inc. (NYSE:TXN - News) Chairman and Chief Executive Tom Engibous on Wednesday said the U.S. economy is clearly recovering, and sales of microchips will grow faster than analysts have predicted amid a rise in demand for advanced chips in consumer electronics.
ADVERTISEMENT"We are clearly in that recovery mode," Engibous told Reuters after a presentation at a Banc of America Securities (News - Websites) investor conference. "Corporate America is more focused on revenue growth than cost cutting."
However, Engibous noted that job growth continues to lag improving economic outlooks among corporate chief executives.
Engibous, speaking at the conference, said he expects growth rates for the chip industry to exceed the 10 percent annual growth forecast issued recently by the Semiconductor Industry Association as advanced microchips expand the capabilities of consumer electronics including mobile phones.
Chip makers are seeking to recover from their worst-ever downturn caused by the long high-tech and telecom slumps.
Engibous said Texas Instruments, the top supplier of microchips for cellular phones, is moving aggressively into theconsumer electronics market, where products are increasingly adding wireless chips to access networks.
Dallas-based Texas Instruments earlier this month said its third-quarter revenue will come in at the higher end of its prior forecast on improved demand for semiconductor products.
That provided further evidence the chip industry is seeing renewed demand from makers of cell phone handsets, computers and other devices, according to analysts.
Texas Instruments said it expects revenue for the quarter to come in between $2.39 billion and $2.49 billion, compared with an earlier forecast of $2.29 billion to $2.49 billion.
Additionally, Texas Instruments said it expects third-quarter earnings of between 20 cents and 22 cents per share, including a 13-cent gain from the sale of 24.7 million shares of Micron Technology Inc. (NYSE:MU - News).
A rival of Intel Corp. (NasdaqNM:INTC - News) and Motorola Inc. (NYSE:MOT - News), Texas Instruments said its new revenue estimate reflected strengthening demand across a broad range of semiconductor products. It noted that revenue from chip products is expected to be between $1.99 billion and $2.07 million, compared with a previous range of $1.89 billion to $2.05 billion.
Separately, Texas Instruments on Wednesday introduced a low-power chip for mobile phones that can communicate with two types of popular high-speed wireless networks.
Shares in Texas Instruments fell 23 cents to $24.52 in active afternoon trade on the New York Stock Exchange (News - Websites). (Additional reporting by Dan Sorid in San Francisco)
