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To: puborectalis who wrote (101160)	6/7/2000 8:40:00 PM
From: puborectalis	Read Replies (1) \| Respond to of 120523

Texas Instruments Sees Higher Q2 Revenue Growth By Nicole Volpe NEW YORK (Reuters) - The chief financial officer of Texas Instruments Inc. (NYSE:TXN - news) on Wednesday forecast accelerating revenue growth in the second quarter as the world's No. 1 maker of computer chips for mobile phones benefits from an explosion in wireless communications. ``In the second quarter, we expect revenue growth to be sequentially higher than in the first quarter,'' TI CFO William Aylesworth told Reuters. ``Year-over-year, the second quarter will continue to show solid growth as well,'' he said in an interview. Speak your mind Discuss this story with other people. [Start a Conversation] (Requires Yahoo! Messenger) Shares in TI, which makes the chips used in about two-thirds of the world's digital cellular phones, were up 9/16 to 81 in midday trade on the New York Stock Exchange. The Dallas-based company specializes in DSPs (digital signal processor) and analog chips, which are used in devices such as cell phones and modems to convert real-world information, such as voice, into digital form. Aylesworth said the company is on track to raise operating margins to 25 percent by the end of the year from 22 percent in the first quarter, excluding certain charges. ``We think the combination of strong revenue growth and expanding margins is the right formula,'' he said. While declining to comment directly on estimates for the second quarter, Aylesworth said the market for its chips was going strong. ``We've expressed our views for the quarter for accelerating growth and strong markets, and that certainly continues,'' he said. PaineWebber analyst David Wong said demand in the communications market for TI's DSP and analog chips could help the company accelerate top- and bottom-line growth to between 20 and 30 percent per year. First quarter revenues, reported in April, rose 27 percent over the prior year's first quarter to $2.65 billion. Pro forma net income jumped 69 percent to $470 million. Aylesworth said he thinks TI's advantage over rivals such as Lucent Technologies Inc. (NYSE:LU - news), Motorola Inc. (NYSE:MOT - news) and Analog Devices Inc. (NYSE:ADI - news) is that it manufactures its own chips and sets the pace in developing new designs. Wong, who rates the stock as ``attractive,'' agreed. ``We think Texas Instruments' investments in advanced chip manufacturing technology give it (a) competitive edge,'' he wrote in a note to clients. Texas Instruments, which invented the integrated circuit, earlier this year increased its capital expenditures to $2.5 billion from $2 billion. ``$2.5 billion looks realistic for what we need for the year,'' said Aylesworth. TI is expanding its capacity at its facilities in Dallas, Japan and Germany and expects to make DSPs at the smaller 300 mm geometries for the first time in the middle of next year. The 300-mm manufacturing process lowers production costs as it allows more chips to fit on a single wafer. ``This will give us gains in both capacity and productivity,'' he said. TI is also moving to 200 millimeter production of analog chips, Aylesworth said. ``We think Texas Instrument's investments in advanced chip manufacturing technology give it an edge,'' said Wong. Compaq selected TI's programmable DSPs and analog-based asymmetric digital subscriber line modem chipsets to power its new Presario line of Internet PCs. Aylesworth said the company is in discussion with other PC makers and expects more such deals. Texas Storms Atlanta Fayad Abbasi Jun 7 2000 Texas Instruments [TXN], among others, is displaying Voice over Internet Protocol (VoIP) telephones at this week's Supercomm2000 conference in Atlanta this week. Offering the ability to make phone calls using packet-based protocol instead of the current circuit-switching technology, network architecture seems to be migrating towards all IP-based transmission. Cisco?s [CSCO] IP telephones, which use Texas Instruments' digital signal processors (DSPs), are among the first of what should be many products capitalizing on IP technology for voice, data, and video. The use of IP has been the catalyst of network upgrades around the world. Many of the companies at Supercomm are trying to capitalize on the migration to IP-based telephony--and even video transmission. For investors, there is only one certainty: there is no great certainty as to who will emerge as the leaders in these spaces. However, we remain confident that whether companies opt to use digital subscriber line (DSL), cable modem, or wireless access, the one constant is the need for DSP chips. And the hands-down leader in DSP chips is Texas Instruments.