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

TI to revamp fab strategies

Posted: 21 Mar 2007     Print Version  Bookmark and Share

Keywords:Texas Instruments  base band IC  fab strategy  fabs  market forcast 

Texas Instruments Inc.'s stock took a minor hit last week, despite an upbeat forecast, but it faces challenges far beyond its share price. Amid stinging losses of its base band chip monopolies at Docomo, Ericsson and Nokia, TI is moving with a new sense of urgency to shake up its corporate culture and revamp its fab and product strategies.

With Infineon, Qualcomm, Renesas, STMicroelectronics and others having made alarming inroads into its prized accounts, TI hopes to become a more nimble competitor. "If I could put out one challenge to the 'TIers' in this room—and in front of the customers in this room—we have to find a way to get back to our roots in speed, agility and flexibility," Richard Templeton, TI's president and chief executive officer, urged in a presentation at the recent TI Developer Conference in Dallas, United States. "Size is not an excuse, [though it's been] the one we use when we talk to people. We have to overcome that."

And it must do so sooner rather than later. TI is in no immediate financial danger, but "there is some leakage" in its wireless business that "could affect the company's business next year," said Will Strauss, president of industry watcher Forward Concepts Co.

As TI watched its stock price slip a notch last week, some of its peers—Analog Devices Inc., National Semiconductor Corp. and Qualcomm Inc.—were providing rosier first-quarter outlooks for the wireless sector. In a conference call with analysts concerning its midquarter forecast, TI took a positive spin, citing improved demand and pronouncing the inventory correction phase nearly over. The company also dropped hints about a new line of single-chip cell phone solutions, even as it quietly prepares major introductions in HDTV devices and multi-core DSPs.

TI's first-quarter sales are projected to fall 5 to 10 per cent sequentially from fourth quarter 2006, but the company's revenue will bounce back and grow 5 to 6 per cent in the second quarter, said Satya Chillara, an analyst with Pacific Growth Securities LLC. While analogue is a bright spot for the company, its wireless and digital light processing (DLP) businesses are sluggish, he said.

So what will TI do? Speculation is rife about how it will respond to the share losses in the base band sector, what its next move will be in consumer-oriented DSPs and whether it will sell its newly constructed 300mm "RFab" in Texas, United States.

TI stunned the industry in January when it decided to drop the costly business of digital-logic process development and rely on foundry partners for those processes. The company has decided to stop internal development at the 45nm node and use foundry-supplied processes at 32nm and beyond, though it will continue to invest in analogue fabs. The intent is to cut costs and free up resources to focus on design.

On the digital side, TI currently works with Chartered Semiconductor Manufacturing, United Microelectronics Corp. and Taiwan Semiconductor Manufacturing Co. It is looking to form a closer R&D partnership with a foundry starting with the 45nm node, and it "is believed to be working with TSMC," Chillara said.

The events have fuelled speculation among analysts that TI may sell its next-generation fab in Richardson. TI has completed the RFab's construction but has yet to equip the facility. Sources said IM Flash Technologies LLC (a joint NAND flash venture between Micron Technology Inc. and Intel Corp.) and Samsung Electronics Co. Ltd. have separately looked at the fab, but TI denies the sale rumors.

Wireless woes
Analysts are also keeping a close eye on TI's product efforts. The company seems to have an uncanny ability to find the right products and markets for a given cycle. During various periods, it has entered or exited the computer business, DRAMs, defence electronics and others.

Last year, TI sold its sensors and controls unit to private-equity firm Bain Capital LLC for Rs.13,236.00 crore ($3 billion), leaving the chip maker to focus on analogue, DSPs and DLP. Its challenge is to look for growth avenues within those still-expanding but maturing sectors.

Even as it looks for new opportunities, TI must mind its current markets—especially the wireless-handset segment, which is rapidly shifting from a sole- to a multi-source model. "TI's wireless exposure is a huge risk, as the company must deal with key customers that are looking for more balance in the supply chain [and are] moving to develop software that is more easily ported between IC suppliers," said Doug Freedman, an analyst with American Technology Research Inc.

- Mark LaPedus
EE Times




Comment on "TI to revamp fab strategies"
Comments:  
*  You can enter [0] more charecters.
*Verify code:
 
 
Webinars

Seminars

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

 

Go to top             Connect on Facebook      Follow us on Twitter      Follow us on Orkut

 
Back to Top