CHIPMAKER Texas Instruments (TI) posted a 68 per cent drop in quarterly profits as the semiconductor industry continues to suffer in the economic downturn.
The company released its fourth quarter 2011 financials yesterday with revenue of $3.42bn, down three per cent from a year ago. While revenue was fairly steady, the firm's profits fell off a cliff with the company making $292m, a 68 per cent decline from the same period in 2010.
To make matters worse, Texas Instruments announced that it will close two fabs in Japan and Texas within the next 18 months. According to the firm those two plants employ 500 people, but it did not say whether the personnel will be reassigned or let go.
Since TI had very little good news to talk about apart from its steady revenue figures, it was no surprise to see its CEO, chairman and president Rich Templeton focus on that. Templeton said, "Revenue in the fourth quarter was higher than expected across all our major product lines, reinforcing our belief that we're at the bottom of this downturn."
Templeton reassured investors by remarking that Texas Instruments' cash flow was looking good, saying, "I'm pleased to say that despite the downturn and the lower factory utilization that came with it, cash flow from operations was strong and well above levels as compared with similar points in prior downturns."
Aside from Intel's bumper financials last week, most semiconductor makers have been facing tough trading conditions. STMicroelectronics announced that it made an $11m loss in the fourth quarter of 2011, highlighting that Texas Instruments' sharp drop in profits could have been worse. µ