Analysts Lay Into Texas Instruments

"As we noted in our April conference call, some inventory of wireless semiconductors was built in Asian markets, particularly China, toward the end of the first quarter. That inventory, which would have been successfully worked through under normal conditions, instead stalled as demand has weakened in those markets. We believe the weakness in demand is largely due to the ongoing economic impact associated with SARS, and should abate as the health concerns are resolved," said CEO Tom Engibous.

It's hardly the first wireless player to complain that business in Asia, weakened by the SARS epidemic, has weighed on sales, following similar commentary in the last week from TriQuint(TQNT), Motorola(MOT) and Nokia(NOK).

Severe Acute

In a release, TI said the slowdown in demand for handsets and excess inventory problems have been especially acute in Asia. Wireless-chip revenue are likely to drop by about 10% from the second quarter, while other semiconductor sales are likely to increase by over 5%.

Compared with last year's levels, though, wireless-chip sales will grow by over 10% and other semiconductors will rise by more than 5%.

TI said its sensor and calculator divisions remain on track with original forecasts.

In regular trading, TI closed up 17 cents, or 0.8%, to $20.39. After hours, shares were dropping 99 cents, or 4.9%.

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