Engibous says TI will use DSP chips in quest for 20% annual growth
After months of casting off divisions unrelated to Texas
Instruments Inc.'s core semiconductor business, chief
executive Thomas J. Engibous told shareholders Thursday his
goal now is now to make total revenue grow an average 20
percent annually.
Mr. Engibous, addressing his first annual meeting as the
company's CEO, outlined his strategy for building TI's market
leadership in chips known as digital signal processors, or
DSPs.
TI's estimated 45 percent share of a $2.3 billion DSP market
is"more sustainable over time than any other position we've
ever held," Mr. Engibous said."DSPs are} something that our
competitors cannot just go out and duplicate. It's an
architectural franchise."
DSPs convert images and sounds into the digital language of
electronic devices. They are key components in the latest
computer modems and disk drives, as well as in cellular
phones.
Since taking the helm of TI in June, Mr. Engibous, 44, has
brought a sense of urgency to the process of restructuring the
company. The longtime TI semiconductor group executive
replaced Jerry R. Junkins, who died last May while on a
business trip in Europe.
The most dramatic changes at TI in recent memory came
earlier this year. TI sold its notebook computer business to
Taiwan's Acer Group and agreed to sell its venerable defense
unit to Raytheon Co.
Jettisoning those units, along with a slump in much of the
chip industry, have made TI a smaller company, although
executives say its profit margins will be considerably higher.
TI reported 1995 sales of $13.1 billion. Last year, the figure
was $9.9 billion.
TI expects the DSP business to grow at several times the
pace of the overall semiconductor industry.
Market research firm Dataquest Inc. projects 12.1 percent
growth this year in the semiconductor business, after a 6.3
perent decline last year. The forecast, released Thursday, was
revised upward from Dataquest's previous estimate of 9.1
percent.
For TI, DSPs can be more profitable than commodity chips,
such as memory chips, because customers will pay more for
products that give them an edge in innovation. For example,
U.S. Robotics' latest 56-kbps modems - the fastest on the
market - rely on TI's DSP chips.
A shareholder asked Mr. Engibous if the company would
benefit from a planned conversion over the next decade to a
digital television standard. Mr. Engibous said TI expects
digital TV to be a relatively small market initially, but it could
eventually become important.
And, he said, the company's DSP chips would be a vital
component in digital TVs.
DSPs offer"perhaps the greatest opportunity for TI since the
invention of the integrated circuit (in 1958}," Mr. Engibous
said."And we are not going to miss it."
North America,United States of America,Central United
States,South Central United States,Texas,D/FW Metro Area
The Dallas Morning News
Author: Alan Goldstein
April 18, 1997 |
