TI leads string of wireless chip warnings

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TI leads string of wireless chip warnings

By CAROLINE GABRIEL

Published: 9 December, 2008

READ MORE: Semiconductor

Texas Instruments is the latest wireless semiconductor firm to reduce its forecasts for the current quarter as market conditions worsen, following similar announcements from Broadcom, Altera and IDT.

In its update, TI said it now expects revenue of $2.3bn to $2.5bn, down from prior guidance of $2.83bn to $3.07bn, with earnings per share of 10-16 cents, down from 30-36 cents.

Broadcom has also reduced its outlook this week, blaming product delivery postponements by customers across all its targeted end markets. It now expects revenue of $1.05bn to $1.10m in the fourth quarter, down from prior guidance of $1.17bn to $1.24bn.

Altera and IDT made similar warnings, also blaming customer caution and postponed orders, though in Altera's case the main problems lie in the computer storage segments. The company expects Q4 revenue to be down 9-12% from third quarter levels, while IDT predicts a 15-18% sequential decline to $165m to $170m, down from previous forecasts of $170m to $185m. "Order patterns have deteriorated since mid-November as customers become more cautious in the face of a weakening economic environment,"said CEO Ted Tewksbury.

The string of cautious statements came on the heels of dampened expectations from wireless market leader Qualcomm, when it announced its last set of financial results last month, and widespread predictions of cutbacks at Intel. One ray of hope came from analysts at Robert W Baird, whose latest semiconductor research note points to a rebound as early as the third quarter of 2009, driven in particular by a boom in sales of netbooks.

Qualcomm made a significant downward revision to its guidance last month but has not updated that since. It expects chip shipments to decline from 85m in the fiscal fourth quarter to 60m-65m in the fiscal first quarter, and a modest recovery only in the second half of fiscal 2009. This led it to downgrade revenue forecasts, looking for a 3%-8% decline to $10.2bn-$10.8bn in fiscal 2009, with earnings per share down 7%-11% to $2.00-$2.10.