Texas Instruments To Sell Part Of Mobile Chip Business
Following a weak third quarter, the company said it will sell part of its cellular baseband operations in a restructuring effort to save over $200 million a year.
Following a third quarter with weak profits and revenues, Texas Instruments said it would sell off part of its wireless business to cut costs.
The company's third-quarter revenue was about $3.4 billion, down 8% from the same period last year. TI also saw net income hit $563, a 26% drop from a year ago. The company said the weak earnings were due to the global economic slowdown.
"We entered the third quarter with a cautious view of the economy and its impact on our markets," said Rich Templeton, TI's CEO, in a statement. "Revenue was weak, as expected, because consumers and corporations reduced their spending in this uncertain economy."
To save costs, the company announced it would reduce expenses by more than $200 million in its wireless business, particularly in the cellular baseband operations. TI said it is "actively pursuing" the sale of the merchant part of this business but did not name a potential buyer.
Reductions will begin immediately, TI said, and any potential deal would be completed by June 2009. The company said the restructuring costs will costs nearly $110 million across the next three quarters.
TI stressed that it will continue to invest in its analog and embedded processing, as well as its OMAP applications processors, which are at the heart of many smartphones today.
"Smartphones are growing rapidly and our handset customers are differentiating their product lines through applications and user interfaces. We anticipated this opportunity and have been investing in it for more than a decade," Templeton said. "As a result, our OMAP applications processors lead the market, and we will concentrate on extending this lead."
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