To: Scrapps who wrote (13479 ) 3/7/1998 3:04:00 PM From: Moonray Read Replies (1) | Respond to of 22053
scrapps, sure hope this story about TXN is not about x2 chips. As if the Semis/Market did not have enough to contend with (INTC, MOT, CPQ...) now we have this: TI Says Asia Took Big Bite Out of Chip Market DALLAS (Reuters) - The Asia crisis has taken at least a $6.5 billion bite out of the global semiconductor market and is hurting near-term profits, executives at Texas Instruments said. Chief Financial Officer Bill Aylesworth said the industry would grow 10 percent this year and that its long-term prospects remained strong, but weak chip orders "across the board" at the end of 1997 were pressuring some key markets. The TI executives spoke a day after Intel, the world's largest maker of computer chips, stunned Wall Street with a warning of a first-quarter earnings shortfall, citing weaker- than-anticipated demand for its microprocessors. "Late in the fourth quarter, customers concerned about the whole Asian situation seemed to be hesitant to place re-orders, " TI's Aylesworth told Reuters. "While order rates have resumed to generally more normal patterns from that, it is still a reason to be cautious in the near-term." He said the global chip market should grow 10 percent to $150 billion in 1998, up from 4 percent last year but still way below the long-term 15-20 percent range that the Dallas-based semiconductor giant had set for the industry. Texas Instrument's chief economist, Vladi Catto, said the global semiconductor market would have grown between 15 percent and 17 percent this year if it not for the Asia crisis. In dollar terms, that means the chip market will grow only about $13.5 billion this year, instead of between $20 billion and $23 billion. "It is a significant impact, but it is not huge, it is not a disastrous impact," Catto said. He also painted a bright picture for 1999, saying renewed economic growth in Asia and capacity reductions caused by the region's recent problems would boost demand and help a recovery in the prices of common memory chips, which have been battered by excess production over the last two years. "If we expect the semiconductor market to grow 10 percent in 1998, then we should expect the industry to grow between 20 and 35 percent in 1999," Catto said. "We can't wait to get through 1998," he added to laughter from industry analysts gathered for a meeting with Texas Instruments executives in Dallas. His one worry for Asia was whether the Japanese government would take firm enough steps to spark a recovery. He said the government so far had "done nothing to reflate the economy" but that he expected it to make the move in coming months. U.S. technology stocks took a battering on Thursday after Intel warned of weaker-than-expected earnings amid falling prices and slowing demand for personal computers. o~~~ O