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TI plans to idle undisclosed fabs

Posted: 10 Dec 2008     Print Version  Bookmark and Share

Keywords:wireless business  cellular base band  retirement program  fab utilisation 

Aiming to trim down costs amid a lower forecast, Texas Instruments Inc. has suspended hiring, curtailed discretionary travel and implemented a voluntary retirement program.

In late December and early next year, TI also plans to idle some undisclosed fabs amid a drop in demand. On average, the company sees fab utilisation rates hitting the mid-40 per cent range in the fourth quarter, compared to the mid-60 per cent range in the third quarter. This represents TI's lowest fab utilisation rates since the second half of 2001.

In a conference call with analysts, Ron Slaymaker, vice president and manager of investor relations for TI, said the company is also working to reduce inventories as a means to cut costs.

Slaymaker described the overall IC market as a ''significant downturn that will last for awhile.'' In a scheduled update, TI said it now expects revenue of Rs.11,508 crore to Rs.12,509 crore ($2.3 billion to $2.5 billion) in Q4, down from prior revenue guidance of Rs.14,160 crore to Rs.15,361 crore ($2.83 billion to $3.07 billion) in the period.

TI said it now expects earnings per share of 10 to 16 cents, down from prior guidance of 30 to 36 cents per share.

Going forward, visibility is limited in the first quarter, he said.

In October, TI it is in discussions with undisclosed potential buyers of its merchant base band semiconductor business but would continue to support some of its custom base band customers. TI said it would cut expenses in the wireless business by about one third, or more than Rs.1,000.73 crore ($200 million) per year, especially in its cellular base band operation.

-Mark LaPedus
EE Times

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