TI's chief calls global chip market strong
By Reuters
Special to CNET News.com
October 27, 2000, 11:50 a.m. PT
BOCA RATON, Fla.--Chipmaker Texas Instruments currently sees strong global demand for its semiconductors, regardless of signs that the U.S. economy is slowing.
"If you look at the semiconductor market now, the strength is in all regions,'' Thomas Engibous, TI's chief executive said Thursday. "I think in every region of the world--Japan, Asia, Europe and the United States--year-to-date growth is above 30 percent. Japan is 45 percent.''
His speech underscored a number of seemingly schizophrenic trends in the chip industry right now. Semiconductor sales are expected to remain strong through 2001. However, unexpected surpluses in cell phone parts and in the memory market, combined with overoptimistic forecasts, have recently created a temporary downturn in certain markets and regions.
Engibous spoke while attending a gathering in Boca Raton, Fla., of the Business Council, a group of top U.S. business leaders.
Communications, Internet and bandwidth companies are "the areas that are really driving growth,'' Engibous said.
Chip demand remains strong even though start-up Internet companies are struggling. The shake-up among dot-coms hurts Texas Instruments only to the extent that it is a supplier to the Internet server market, Engibous said.
"While the large number of dot-coms we read about lack success, the success in some of the others is so strong. If you talk to Sun Microsystems, their business is just booming,'' Engibous said. "That's our biggest link into the dot-com area.'' Likewise, Dallas-based TI isn't directly hurt by the weakness of the euro because the company mostly uses a dollar-based pricing system in Europe, Engibous said.
Europe would only affect TI if consumers there "choose not to replace cell phones at that same rate that they have, which we haven't seen,'' Engibous said. "We've also seen new subscriber rates stay at a very, very high growth rate.''
Texas Instruments is expanding in nearly all regions where it operates by investing $2.8 billion this year, he said. The expansion is "mostly in the areas of wafer fabs--and not so much in brick and mortar, but in equipment for buildings that were built a couple of years ago,'' Engibous said. |
