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Chip Sales Bounce Back at Texas Instruments

TSC Staff

The scorching chip sector could feel more juice Tuesday after Texas Instruments(TXN) reaffirmed guidance and said semiconductor sales in January and February were relatively strong.

Speaking at a conference, Chief Executive Tom Engibous said TI expects first-quarter revenues that are flat with the fourth quarter's $1.79 billion and break-even on a pro forma basis, which would match analysts' consensus estimates.

The company said semiconductor orders in the first two months of the first quarter were strong compared with the first two months of the fourth quarter. As a result, the company's book-to-bill ratio could be close to 1 for the first quarter and semiconductor revenue could grow sequentially.

It's the latest dose of positive news for chipmakers, who've led the market's recent rally and are up in the neighborhood of 18% over the last two sessions as measured by the Philadelphia Stock Exchange Semiconductor Index or SOX.

In pre-market Instinet trading Texas Instruments' shares were rising 16 cents, or 0.5%, to $34.15. Intel was also higher, adding 90 cents, or 2.8%, to $32.70 following a Morgan Stanley upgrade. The company holds its midquarter analysts meeting this week.

While Texas Instruments saw sequential gains, they were not necessarily shared industrywide. The Semiconductor Industry Association says worldwide semiconductor sales fell 1.7% in January from December. On a year-over-year basis, sales were down 39.8%. Sales of DRAM and PLD chips were up 24.2% and 21.3% respectively from December.