TI chief warns on rebound hopes

Texas Instruments’ chief executive does not see a quick rebound in the economy and expects lower long-term growth rates in future for the microchip industry.

“There are signs of optimism,” said Richard Templeton, CEO of the semiconductor maker, speaking at a webcast JPMorgan investor conference on Tuesday. “But we’re careful.”

He pointed to some “relative strength” recently in demand for end products using the company’s microchips, such as notebook computers and base-stations for wireless networks coming from China, but he said such strength had not spread to the United States or Europe or to broader industries.

“Those are pretty good signs that say, historically, ‘Be careful,’” he added. “It hasn’t fully worked its way through.”

He offered no guarantees orders would bounce back in the second half of the year, as some in the industry have forecast.

“You’ve got to get inventories down, which I think we’ve done through the first quarter. Customers have then got to start seeing their demand firm up a little bit, then you’ll start getting a better sense of the second half,” he said.

In the long-term, Templeton said sales of microchips were bound to slow from the high growth rates of recent times. “If a world once thought of semiconductors as 15 per cent growth, I think you’ve got to be a little more balanced and think about it as upper single digits, just because of the law of large numbers,” he added.

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