TI CEO Says Chip Market Likely Bottomed In 4Q11 Or 1Q12

The semiconductor market likely bottomed within the past few months, Texas Instruments Inc.'s (TXN) chief executive said, though he cautioned it's still too early to be certain.

Rich Templeton, speaking Tuesday at a technology conference, echoed comments that the company made during its earnings call last month. At that time, TI said the worst appeared to be in the past and demand should soon improve.

Templeton on Tuesday said the market likely bottomed in the fourth quarter of 2011 or is bottoming now. He added that it's still too early to say what the recovery will be like, but he believes the company will have better clarity in March or April.

"This thing is going to bottom, and then everybody is going to realize they over-compensated," Templeton said. "Inventories are too lean, and [customers] don't have enough products."

He added that TI's margins are "pretty healthy," which he called a "great sign going forward."

TI, which makes chips used in everything from cellphones to industrial equipment, had suffered from a broad-based decline in demand as customers were worried about the broader economy. The company in January gave a more upbeat outlook, and said that purchases from customers were starting to recover.

Among its stronger businesses in recent periods was TI's smartphone and tablet applications processor, dubbed OMAP. The chip is used in devices like the Amazon.com Inc. (AMZN) Kindle Fire.

Templeton on Tuesday said OMAP "is really in a great place," and he sees opportunities to expand the processor into other products, such as automobiles, TVs and computers. He also said cloud computing, which allows users to store and access their content over the Internet, is a big opportunity for technology providers going forward.

"We feel very good about where we are today with the tablet wins and the smartphone wins, but more importantly, we feel great about where this is pointing us longer term," Templeton said.

TI shares, down 8% over the past 12 months, slipped about 1%, to $32.95 in recent trading.

-By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com

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