Texas Instruments Inc’s third quarter was much healthier than Wall Street had expected because its memory business, that it officially handed over to Micron Technology Inc at the end of quarter, didn’t perform as badly as expected. Nevertheless TI warned that this doesn’t mark and end to the slump in the semiconductor market. DSP growth slowed to 17% over the same period last time while analog revenue declined. TI expects its DSP and analog semiconductor business to account for up $1.3bn by year-end. DSP and analog chips accounted for 58% of its third quarter semiconductor revenue. Semiconductor revenue declined 8% overall, mainly due to declines in hard disk and modem markets. Revenue from the memory business was down 52% due to the continuing collapse in DRAM prices. Losses were $155m, up from $29m year over year, but down from $222m sequentially. The materials and controls business declined 5% to $227m while educational products – calculators – declined slightly to $133m. TI reported third quarter net income of $164m down from $1.7bn last time that included a gain of $1.47bn on revenue which fell 15% to $2.11bn from $2.5bn last time. Earnings per share were $0.40, well above analysts’ estimates though the company’s financial model includes gains for catch-up royalties received from Taiwanese chipmaker United Micro Corp, worth around $0.05 per share which won’t be as high in the fourth quarter. It has signed a 10-year patent cross-license deal with UMC. TI now has three Taiwanese partners. At the nine month mark, net income declined to $218m including $560m charges compared with $2.09bn last time which included a gain of $1.7bn and charges of $110m, on revenue which declined 11% to $6.46bn from $7.32bn.
