DALLAS--Texas Instruments Inc. here is expecting no seasonal slowdown in chip sales in the first quarter of 2000 after posting a 26% increase in revenues during the final three months of 1999.
The Dallas-based company today reported revenues of $2.6 billion in the fourth quarter compared to $2.0 billion during the same period in 1998. TI's net income more than doubled to $430 million vs. $199 million in the final quarter of 1998. For the entire year, TI revenues grew 10% to $9.5 billion compared to $$8.6 billion in 1998. Its pro forma income was $1.5 billion vs. $765 million in 1998.
TI said it plans to increase capital spending by 40% to $2.0 billion in 2000 to meet the growing demand for products, and it will begin installing 300-mm wafer equipment in an empty Dallas fab building this year. TI's 300-mm fab is slated to begin production in the second half of 2001.
During a conference call with analysts today, TI management said strong demand for digital signal processors and DSP-related analog chips would most likely increase the company's revenues sequentially in the first quarter of 2000 over the fourth quarter of 1999. TI said DSP revenues grew 39% in the fourth quarter from a year ago, while analog sales increased 24%.
Cellular phones--a major consumer of TI's DSP chips--are expected to continue strong unit growth in 2000, but TI management is not yet ready to release a forecast for this year.
"We don't have an official forecast yet for handset growth, although every indication is that it's going to be very strong again," said William A. Aylesworth, senior vice president, treasurer, and chief financial officer at TI during the analyst conference call. He added that he thought a repeat of the 70% growth rate in 1999 was possible, but "it is really too early for us to put a number on that at this time."
TI's R&D budget for 2000 has been set at $1.5 billion vs. $1.3 billion pro forma in 1999. The vast majority of the R&D spending is now going to DSP and analog chip technologies, the company said.