Through The Fly's Eyes: Texas Instruments

from Theflyonthewall.com









Weak Results at TI; Waiting For New Product Ramp

The handset market is maturing and Texas Instruments (TXN) results clearly showed this:

• 5% decline in semiconductor sales sequentially
• Wireless was the primary reason for the weakness, declining 10% sequentially. Handset growth is shifting to lower end products
• Orders down 10% -- weak
• Book to bill is at .89 -- weak
• Expect revenue to decline for 1Q07 of 5% to 13% -- weak
• Growth at TI is coming from a low-cost integrated chip for low-end phones sold in emerging markets. While this business is growing, it does not offset the weakness of the higher end 3-G business.

For TI to grow again, it needs a higher end product to take hold. Specifically, a mass market RIMM, Treo, or Q-type device. This most likely will not happen until the 2007 holiday season.

No need to rush into TI's stock. Wait for seasonally weak summer season to look at this stock again.