TI, DSPs, and purchased technology................
TI CFO sees solid growth for DSP business
By Richard Melville
NEW YORK, Jan 21 (Reuters) - Texas Instruments Inc expects
continued strong growth from its digital signal processing
business, a product line that now accounts for nearly 40
percent of its overall revenues, chief financial officer Bill
Aylesworth said on Wednesday in a telephone interview.
Aylesworth said TI expected 30 percent revenue growth from
its DSP business in 1998, after a 35 percent growth rate in
1997. The processors currently are used mainly in digital
cellular phones, modems and computer storage devices, such as
hard drives.
Aylesworth said orders in the last of those markets -- hard
drives -- showed signs of emerging from a suggish period.
"That market segment has been going through some inventory
corrections over the last two or three quarters but we've seen
a recent pickup in orders there," he said.
The troubled times in the hard drive industry has prompted
restructurings and layoffs in companies like Seagate Technology
Inc and produced massive declines in share prices
across the industry.
Aylesworth also said growth should come as use of the
processors broadens to areas like DVD [note -- TI does not make any DVD decoders. What is the CFO talking about?] -- an abbreviation that
once stood for digital video disk but now, confusingly, refers
to digital versatile disk, a new name for essentially the same
technology. Use of the processors in new communications devices
also should provide strong growth opportunities, he said.
Over the past year, Texas Instruments has intensified its
efforts to focus on the higher-growth DSP business, which
represented 45 percent of its semiconductor revenues in the
fourth quarter. Semiconductors comprise about 85 percent of
TI's overall revenues.
Aylesworth said much of the company's planned $1.4 billion
in capital expenditures and $1.3 billion in research and
development spending would be "very intensely focused" on the
DSP area.
He said spending levels this year, up from $1.2 billion in
capital expenditures and $1.1 billion in R&D in 1997, were
being constrained by the company's near-term cautious outlook
on market conditions, particularly with respect to the economic
turmoil in Asia.
"The internal demand of our people to put capital in place
to execute their plans is really greater than that," he said.
"Near-term we need to be somewhat cautious because of the Asia
environment."
Aylesworth said opportunities might arise over the course
of the year which would prompt TI to boost capital spending
from the planned levels.
Texas Instruments has made several acquisitions of
technology companies in an effort to extend the reach of its
DSP business, most recently buying Amati Communications
Corp.
Aylesworth said TI would continue to evaluate possible
acquisitions that meshed with its goal of building the DSP
business. |
