Date: 27/01/2009

26% fall in sales revenue in 4th Quarter 2008 triggered TI to layoff 1800 employees

TI's revenues for 4th quarter 2008 declined by 30 percent to $2491 million in comparison to the fourth quarter of 2007 and declined 26 percent compared with the third quarter of 2008. Revenue in all semiconductor segments declined in both comparisons. TI's revenues for full year 2008 are decreased by 10 percent to $12.5 billion in comparison to full year 2007.

TI also announced it is making reductions in employment because demand has continued to weaken with the slowing economy. Employment will be reduced 12 percent through 1800 layoffs and 1600 voluntary retirements and departures.

"We are realigning our expenses with a global economy that continues to weaken," said Rich Templeton, TI chairman, president and chief executive officer. "By reducing expenses now, we keep TI financially strong and able to invest for future growth.

"Most of the reductions will come in our internal support functions and non-core product lines so that a greater percentage of the dollars we spend will go directly toward developing and supporting Analog and Embedded Processing products. We believe these are the areas that will drive TI's future growth and allow us to achieve our financial objectives.

"We are not counting on a near-term economic rebound for improvement. The actions we are taking to reduce expenses and inventory will position TI to deliver solid financial results, even in a period of prolonged economic weakness. When the economy strengthens, we'll be pleased that we focused aggressively on our core product lines."

Segmentwise sales of each semiconductor category:

TI's anlog semiconductor revenues for full year 2008 remains nearly flat at $4.85 billion in comparison to full year 2007 of $4.92 billion. TI makes some of the industry's finest Op Amp, ADC, and power supply ICs.

TI's DSP and Microcontroller business (also referred as Embedded Processing) revenues for full year 2008 are down by 3% to $1.63 billion in comparison to full year 2007 of $1.58 billion. In embedded system business strategy of exclusive DSP is no more working. Just focus on microcontroller which does both DSP and traditional microncontroller tasks.

Wireless IC segment revenues for full year 2008 are down by a bad 19% to $3.38 billion in comparison to full year 2007 of $4.19 billion. Just few quarters earlier in early 2008 wireless IC segment was highly growing area, as the consumer product market started hitting ground, wireless market felt the pinch.
Also the competition here from fabless startups and other biggies might have added to TI's fall in revenue.

All the remaining categories TI group into 'other'. The Other segment revenues for full year 2008 are down by 16% to $2.63 billion in comparison to full year 2007 of $3.12 billion.

All this is quite a bad news for whole electronics and semiconductor industry.