SAN FRANCISCO—Texas Instruments Inc. said Wednesday (Nov. 14) it will cut about 1,700 jobs worldwide as part of a previously disclosed plan to re-target R&D for its OMAP product line at the embedded systems market, away from smartphones and tablets.
The announcement that TI would refocus OMAP caught many off guard because the product had notched a number of high-profile design wins. But analysts, particularly Will Strauss of Forward Concepts, said the trend in smartphones is toward integration of the applications processor and baseband processor—a trend TI can't keep up with because it began phasing out its baseband technology years ago.
At the time, TI also noted that Apple Inc. and Samsung Electronics Co. Ltd.—which together dominate the smartphone and tablet markets—design their own applications processors, leaving less of an available market for OMAP to compete in.
In an interview following TI's announcement Wednesday, Strauss said he was expecting TI to cut jobs after changing course with OMAP.
"We knew the hatchet was coming down. It had to," Strauss said. "They had a bloated operation there for the reduced market that they were facing."
But Strauss—who said he was certain TI explored the possibility of selling all or part of the OMAP division prior to Wednesday's announcement—said he was surprised by the number of jobs eliminated. "TI's way is usually more subtle," Stauss said. "But then again, we've got an overall market that is headed down right now."
Semis is global, bullsh*t statements send them back do no help. TI make most of their stuff in Taiwan and other Asian countries, to remain competative. tjey where one of the first licencees of Arm.
Secret of success is innovation and margin, AP provide neither. The move is sound, the number is surprising but its fitting the workforce to the on going business
@sprite, TI becoming next motorola, that would be exaggerating facts. TI's other businesses are doing pretty good, its just that they are getting out of wireless because they think they can do well in other domains like Analog which is the core strength of TI. If you remember TI has retained all its analog fabs.
@sprite0022, kodak business is totally different from semiconductor business. Semiconductor is very huge market. It includes wireless, it includes MCU, it includes embedded. Failure in one domain will not impact the revenue stream.
@jmrowca, I dont think Rich has any role to play in this decision of TI. What will you do with an entitiy which is making loss year after year. Samsung has started building its own processors, Apple is also trying new vendors for its processors so TI has not major customers left in wireless wing.
Please check facts TI Wireless revenue in 2006 = 4.35B after that they never invested in it and all other compition did so they where overthrown.This was clearly written on wall from 2007, only people who called fooled where i think WS.
@shub, may be you are right. This is failure on part of TI that it didn't invest wisely in 2007. But you can't undo things which you did earlier. All I am saying is in this current environment TI has taken the correct decision.
@eewiz, I dont think TI lost the fighting spirit. Its just TI's new strategy. Infact this is smart move by TI because they want to get out of loss making business. Fact of the matter is margins in wireless domain has fallen drastically and thus TI wants to concentrate purely on Analog and embedded side.
If there are very high margins to be made anywhere, that will naturally attract a lot of competition and the margins will be marginal over time. So if we are to get out of any business because of low margins, there will be no business TI can do. The solution is to is keep innovating, not getting out. NVdia, who even doesnt have the same kinda history in App processors as TI, has succesful TEGRA line. now what is TI doing??????
it's hard to imagine a marketing ppl with a business degree, ok maybe a mba, how can he guide a tech company to compete.
I just watched another salesman turned coo's address, it's pretty much bullsh t.
all he know is cost saving,
APs are now low margin commodities, better to focus capital and resources om something that will return net margins. analog, mixed-signal, power management, custom embedded ARM with mixed signal and NV memory. Why stay in a market and drag down overall margins? Need to find markets where they can innovate and differentiate.
"TI can't keep up with because it began phasing out its baseband technology years ago"... They shoot their feet, and now blame wounded feet to cut leg.. they may kill themselves oneday blaming not having leg.
@Stanley, lets not be too pessimistic about TI. TI acquired National recently. I think this is one more reason why we are seeing this layoffs because they would like to trim the employee number to reduce the costs. This is just TI side layoffs, we haven't heard how many people from National were removed from the job when the merger happened.
exactly. all the "high margin" analog mixed signal components will be integrated into an app processor sooner or later. Then TI will have no option other than to shoot themselves.
National acquisition has nothing to do with OMAP closing down. OMAP is not overlapping with any of National's product line. Again who's pessimistic abt what? IMO its TI whos pessimistic about their ability to compete.
@eewiz, my point is there is lot of redundancy in work force because of TI-National merger. For example insted of 1x not TI has 2X designers and it would be hard to maintain the extra workforce when there is slow down.
Competitiveness is not the sole responsibility of a specific technology but should be ingrained as a corporate culture. A rare thing to be maintained over the life of an 'old' tech co. like Moto/TI. GE is one of the few cos. the exude this- but then again look what Jack Welch built!
This comes as a surprise ? Not. When the attitude was to demand a virgin, cure for cancer, mobile account or first born - (take your pick from the multiple choice) before one could be "privileged" to work with OMAP - potential accounts were turned off. Stop begging the big wigs to work with you and support those that do.
This is what happens when there is vanilla designs based on ARM....no differentiation, means You Die. Period. Next one is Freescale, then Marvell, then broadcom, and on and on. ARM means loss of jobs. Send ARM back to UK. They can live with their Austerity over there
Technology means loss of jobs? Let's go back to hand weaving, there will be jobs for everyone!
I think that the problem here was TI's traditional position that DSP is the important part, and the general purpose CPU is just a control/management bag on the side. The Stellaris and MSP430 lines where they just do the standard SoC seem to be selling well.
trend TI can't keep up with because it began phasing out its baseband technology years ago.
@Dylan, thanks for the post. Is it very difficult for TI to review its baseband technology ? Why did TI phase out its baseband technology ?
@ yalanand, r u TI CEO's PR or sth?
anyway, this is a MAJOR failure for ti!!!
nb can deny it.
a project failed to take off due to planning, excution failure.
next time if TI want to hire someone, it better write in it's ads: this is a contract position, might gone in 1-2 years, better rent an apt, don't buy expensive cars...
@sprite0022, :). I am neither PR nor sth, I am a VLSI engineer. I totally agree with you that its a failure on part of TI nobody can deny it but I believe TI has done the right thing by exiting the market where margins are hard to comeby.
TI quits OMAP , TI left baseband a while ago...
Nvidia is doing Tegra well, is trying hard to integrate baseband into it.
yes it's a tough fight, so TI just quit and ran, while others, including many other companies, are fighting for this very same market?
No CEO is going to call this a loser attitude, they always call it a strategic move, for long term growth, blahblah
So long Texas-India(TI)
I might not be the one under the axe (as a TI employee) but they had to cope with the probability of losing out on a market without the baseband business they phased out. There is no fighting in a world when you do not have the right weapons/tools. TI rather do well in an arena where we not only have the right weapons but in which currently we are the strongest. Is this a dangerous move to play just with a few cards: SURELY but having made its decision on dropping baseband a few years ago, coping in a world where integration of the applications processor and baseband processor is going to happen was/is going to be difficult. Tough on everyone involved but in the context required. Losing a cancered limb to save the body.
TI leads when TI teams up with industry leader. TI won in Wirelles when we (i was TI in the era of TJE and GDEL) got design-in at Nokia at the time when Nokia was potentialy a rising star. When industry leadership moved away from Modem/Nokia towards aps (to finaly end up at Aple) TI was not there anymore to take risk, to cointinue winning new design, to maintain a pioneer winning fighting spirit, to team up with the new rising leaders.
Then TI reorganized, cut costs, gave up design-in, innovation, risks, investments, Modem design and last but not least IC fabrication.... in my view TI then became a mee-too simply capitalizing on "reuse/implementation" of ARM with DSP OMAP short term non sustainable advance.... One key point is fabrication of advanced technology that moved away from traditionnal SC manufacturing including TI toward global foundries. In the Wireles times TI was winning because TI was leading technology process ahead of competitors (full technolopgy entitlement was the slogan). This competitive advantage is definitively gone, wether TI continues OMAP or not wether TI had continued Modem or not.
So yes i agree TI is missing his former courageous leaders and their challenging startegies , but,let us be fair, TI is also missing technology leadership which is gone for ever.
a salesman CEO is doomed,
just like otellini co. with the ultrabook joke.
their brain is full of $ signs instead of tech.
this is just part of healthy cycle of mother nature. make ppl humble and re energized...
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TI has been on the back foot for quite some time now and may be they didn't feel so comfortable in the digital platform market which is increasingly driven by cost. So good they are moving away to grow elsewhere which is not a bad move overall.
It's difficult for companies to survive in multiple domains when the economy is in a spiral and they may endanger their core business if they are too stubborn to see the reality.
mobile is rapidly growing area, and mobile processor is at the heart. I'm not sure what else TI has to focus. It's meaningless to look back, but
1. what if TI keep working on modem technology and fight for LTE and try to integrate with OMAP?
2. what if TI keep having digital manufacturing in-house?
TI could have been only company making integrated high performance MP/modem in IDM environment now..
Engineer CEO could have seen this trend, unfortunately sales CEO couldn't...
It looks like both TI and and ST have made the same flawed move. The Samsung/Apple duopoly is coming to and end as Sony/Motorola/HTC make better products (IMO). These companies need a strong competitor to Qualcomm. Following the breakup of ST-Ericsson a TI CEO with any balls would pick up where ST left off and get into bed with Ericsson, undoing it's silly exit from mobile basebands a few years ago.