The company, a major provider of processors for mobile phones and other devices, said it now expects to report earnings of between US$0.10 per share and $0.16 for the current quarter, which ends Dec. 31. TI previously had forecast earnings of $0.30 to $0.36 for the quarter, when it reported its third-quarter results on Oct. 20.
Revenue is likely to be in the range of $2.30 billion to $2.50 billion, down from the previous prediction of $2.83 billion to $3.07 billion, TI said.
The announcement came as two other chip vendors also lowered their forecasts. National Semiconductor reported that sales and profit for its second quarter, ended Nov. 23, were down dramatically from a year earlier. At the same time, it predicted sales would be down 30 percent in its third quarter. Also Monday, Altera, which makes programmable processors, lowered its fourth-quarter forecast to indicate a 9 percent to 12 percent drop in sales from the third quarter. The bad news followed recent lowering of guidance by chip giants Intel and Advanced Micro Devices.
"This is a very broad-based decline," said Ron Slaymaker, TI's vice president and manager of investor relations, on a conference call following Monday's announcement. "All major product lines are down. All major product lines are down more than we had expected in October."
The current woes are different from those the industry experienced around 2001. Those were caused mostly by excess inventory, Slaymaker said. Paring down the inventories of TI and its customers will help but not solve the problem, he said. "It is a demand-driven downturn," Slaymaker said.