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TI cites inventory overhang as Q4 sales dip

Texas Instruments has reported Q4 sales of $4billion, down 3% sequentially and 2% year on year. For the full year revenues were $15.6 billion down from $17.5 billion last year.

In the product segments analog sales were $3.17 up 2% year on year. Embedded processing revenues plummeted 18% year on year to $613 million. Other product revenues rose 7% year on year to $220 million.

Commented Dave Pahl, Head of IR & VP: “Our results reflect increasing weakness in industrial and a sequential decline in automotive, as customers work to reduce their inventory levels.”

Focusing on sequential performance, Pahl said that the industrial market was down mid-teens as we saw that increasing weakness.

“The automotive market was down mid-single digits after three and a half years of very strong growth, and personal electronics was about flat,” he continued.

TI’s communications equipment were down was down low-single digits, and enterprise systems grew low-single digits.

Pahl added: “As we do at the end of each calendar year, I’ll describe our revenue by end market. As a percentage of revenue for 2023, industrial was 40%, automotive was 34%, personal electronics 15%, communications equipment 5%, enterprise systems 4%, and other was 2%. In 2023, industrial and automotive combined made up 74% of TI’s revenue, up about nine percentage points from 2022 and up from 42% in 2013.

“We see good opportunities in all of our markets, but we place additional strategic emphasis on industrial and automotive. Our industrial and automotive customers are increasingly turning to analog and embedded technologies to make their end products more reliable, more affordable and lower in power. These trends have resulted and will continue to result in growing chip content per application, which will drive faster growth compared to our other markets.”

TI has invested $3.8 billion in R&D and SG&A, over the past 12 months and invested $4.8 billion in capital expenditures and returned $5.7 billion to owners.

The company’s first quarter outlook is for revenue in the range of $3.74 billion to $4.06 billion and earnings per share between $0.94 and $1.16.