National Semiconductor Corporation (fkaNSM)

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Saturday, Mar 29, 2008, Page 11

National Semiconductor Corp chief executive officer Brian Halla said on Thursday that demand for mobile phones is holding up even as the economy slows.

"So far, people keep buying," Halla told Bloomberg Television. "There is caution out there, especially when kids have to face a choice of taking five dollars and putting it towards a new cellphone or buying one gallon of gas."

National Semiconductor, the maker of chips for devices such as Apple Inc's iPhone, gets more than a third of its sales from mobile-phone companies.

A tighter credit market and record oil prices hadn't hurt wireless demand yet, Halla said. That contrasts with predictions this month from Texas Instruments Inc and Sony Ericsson Mobile Communications Ltd.

Texas Instruments, which is the second-largest maker of chips for mobile phones after Qualcomm Inc, cut its sales and profit forecast on March 10, citing slowing demand for phones that download music and access the Internet. The next week, Sony Ericsson, the world's fourth-largest handset maker, said first-quarter earnings and revenue would fall because of slower handset sales.

Halla, 61, is facing stalling revenue growth. On March 6, he forecast fiscal fourth-quarter sales of up to US$460 million, a 1 percent gain from a year earlier.

Halla, a former Intel Corp executive who has led National Semiconductor for more than a decade, said on Thursday that the company's revenue from mobile phones is a good indicator of the health of the overall economy.

"A lot of people got together and said that the sky was falling in," Halla said. "We watched the cellphone market and people kept buying them."

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