Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
EE Times-Asia > Manufacturing/Packaging

TI customers delay new orders

Posted: 25 Jul 2012 ?? ?Print Version ?Bookmark and Share

Keywords:Texas Instruments? TI? ASIC? OMAP applications processor? embedded processing?

According to executives from Texas Instruments (TI), weak economic conditions have pushed OEM customers and distributors to hold off placing new purchase orders. They said the drop in new orders started in June and has persisted into July, cutting into the company's order backlog for Q3.

As a result, the sales target was lower than analysts expected. The company also reported sales for Q2 fell slightly below analysts' expectations.

Kevin March, TI's CFO, stated that TI believes both OEM customers and distributors are behaving cautiously in placing new orders either because they are worried about slowing demand for their own products, or because lead times for nearly all of TI's parts are low enough that they don't feel the need to order parts months in advance. "It's really not apparent to us why that is the case."

Q2 sales came in largely as expected, but that the slowing orders created uncertainty and limited visibility for Q3, causing the company to forecast that Q3 sales would be roughly the same as Q2. The company typically sees an average increase of about six percent in sales in Q3 compared to Q2. This is according to Rich Templeton, TI's chair, president and CEO. "If customer demand increases as the quarter progresses, we are ready to support higher shipments with short product lead times, a strong inventory position and available manufacturing capacity."

TI's Q2 sales totaled $3.34 billion, up seven percent from Q1 but down four percent compared to the same period of 2011. The company's net income for the quarter totaled $446 million, up 68 percent from the previous quarter but down 34 percent compared with the year-ago quarter.

Q2 sales fell just short of consensus analysts' expectations of $3.35 billion, according to Yahoo Finance.

Sales of TI's analog products increased by seven percent compared to Q1, while embedded processing product sales grew by eight percent and sales of other products including DL products, custom ASIC products, calculators and royalties, grew 16 percent sequentially, TI said. Sales of wireless productsincluding baseband products, connectivity products and OMAP applications processordeclined by eight percent compared to Q1, the company added. TI is phasing out its baseband chip business and expects sales of basebands to drop to zero by 1Q13.

TI said it expects Q3 sales to be between $3.21 billion to $3.47 billion, roughly flat at the midpoint with Q2 sales. March said Q3 sales typically improve by an average of six percent compared to Q2.

TI's Q3 sales target came up short of consensus analysts' expectations, which called for Q3 sales of about $3.54 billion, according to Yahoo Finance.

- Dylan McGrath
??EE Times

Article Comments - TI customers delay new orders
*? You can enter [0] more charecters.
*Verify code:


Visit Asia Webinars to learn about the latest in technology and get practical design tips.

Back to Top