Texas Instruments Forecast Indicates Ongoing Semiconductor Slump

The semiconductor industry is facing a tough period, and Texas Instruments, a leading player in this space, has provided a disappointing earnings outlook for the upcoming quarter. This forecast underscores the ongoing issues stemming from sluggish chip demand and rising manufacturing costs.

According to a statement released by the company, Texas Instruments expects its profit for the first quarter to be between 94 cents and US$1.16 per share. Notably, the midpoint of this range, which is US$1.05, is significantly less than the US$1.17 that analysts had anticipated on average.

Additionally, the company projected sales to be in the range of US$3.74 billion to US$4.06 billion, also falling short of the analysts' estimate of US$3.86 billion. This continued decline in sales marks nine consecutive quarters of decreasing revenue for Texas Instruments.

The persistent slump faced by much of the electronics sector contributes significantly to these ongoing declines in sales. Executives from the company noted that rising manufacturing expenses are further impacting profits. Texas Instruments earns the bulk of its revenue from manufacturers across industrial sectors and vehicle production, and thus, its performance is seen as a key indicator of the broader global economy.

Despite earlier indications from Texas Instruments' executives that some areas of the business were starting to recover from a previous inventory overhang, the expected rebound has not materialized as swiftly as investors had hoped.

Following the announcement, Texas Instruments' stock experienced a decline of approximately 3 percent during after-hours trading, though it had seen a 7 percent increase earlier this year.

Texas, Semiconductors, Forecast