The chips are down, warns TI

Chipmaker Texas Instruments (TI) today warned of an increasing decline in revenue and profit.

TI blamed the slowing economy and even more sluggish telecoms market. The company said it would boost its R&D spending while cutting back on capital investment. In a conference call this afternoon, the company said the fall in revenue for this quarter will hit 20 per cent, double the prediction earlier this year, and that margins would drop by between six and eight per cent instead of five and six per cent. R&D spend will rise slightly, to $1.7bn for 2001, while capital expenditure will drop 30 per cent to $2bn. Tom Engibous, TI chairman, president and CEO, said in a statement:" We continue to believe that DSP (digital signaling protocol) and high-performance analog are the core technology drivers of the internet age. We are well prepared to resume strong sales and earnings growth when the economy and our markets rebound." Last year, TI had revenue of $11.8bn, with operating profits of $2.7bn.