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Technology Stocks : Texas Instruments - Good buy now or should we wait? -- Ignore unavailable to you. Want to Upgrade?

To: djane who wrote (3961)	7/29/1998 10:57:00 PM
From: djane	Respond to of 6180

TI remains cautious on third quarter. DSP chips seen driving growth in 1999 cbs.marketwatch.com By Binti Harvey, CBS MarketWatch Last Update: 12:10 PM ET Jul 29, 1998 Also see NewsWatch SAN FRANCISCO (CBS.MW) -- Texas Instruments Inc. expects its difficulties to continue for the remainder of the year, but the company is counting on its digital-signal-processor business to propel growth in 1999. The leading manufacturer of memory chips and digital signal processors (DSPs) has seen its stock suffer over the past several months, plagued by falling prices on memory products and the economic turmoil in Asia. Shares fell 1/4 to 58 3/4 Wednesday. At a BancAmerica Robertson Stephens semiconductor conference in San Francisco, TI (TXN) reiterated its expectations for a glum remainder of this year. The company maintains a cautious outlook for the third quarter and anticipates that its memory business will place additional pressure on revenue. The company also expects negative 1998 market growth for the semiconductor industry. But the company sees brighter days ahead. Now that TI has shed its troubled dynamic random access memory (DRAM) business, the company is free to focus on its DSP business, which analysts expect to drive revenue growth in 1999 and beyond. DSP chips are used primarily in communications-related devices and networking equipment. Executive Vice President Rich Templeton noted that although competitors have emerged in the DSP market, the market leader is not threatened. IBM has begun cloning TI's DSP chips, while Lucent Technologies and Motorola have teamed up to develop a separate DSP offering. "They're two years late," Templeton said. "We don't think it makes the competitive landscape worse because, in the meantime, we're developing the next generation of DSPs." Templeton said the company continues to shoot for a 20 percent revenue growth rate over time, and he said he's confident that, with the DRAM business gone, TI will be able to achieve that goal. The company said its analog business is performing well, as it has captured market-share leadership in that industry. Robertson Stephens analyst Daniel Niles continues to recommend Texas Instruments' stock with a "buy" rating, based on his expectations for non-DRAM momentum. "Sustained growth in the components sector [and] continuing dominance in the DSP and ASIC markets should enable TI to sow good growth going forward," Niles said. "We recommend aggressive purchase of the stock at these levels and maintain our $75 year-end price target." Binti Harvey is a reporter for CBS MarketWatch. CBSMW MarketPlace c 1998 MarketWatch.com, L.L.C. All rights reserved. Disclaimer. MarketWatch.com is a joint venture of CBS and Data Broadcasting Corporation. CBS and the CBS "eye device" are registered trademarks of CBS Inc.