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Tech Titans Eye Economic Upturn

DALLAS ( TheStreet) -- From Greece's ongoing fiscal farce to the U.S. government's debt crisis, this hasn't been the easiest of years for the global economy.

As a result, many tech heavyweights (including even recession-buster IBM (IBM)) have felt the pinch of tighter IT budgets, both in America and overseas.

Fear not, though. Chip giant Texas Instruments (TXN - Get Report) thinks that, at least in the semiconductor space, things are starting to look up after a slowdown in IT spending.

Texas Instruments

"We're probably seeing early signs of a bottom starting to form," Kevin March, the company's CFO, told TheStreet. "For example, we saw our new order pattern drop sharply in July, then fall in August and September at a slower pace."

March added that customer inventories of TI products appear healthy, which points to an improving spending climate. "They have what we would call levels consistent with their rate of production," he said. "They don't have excess inventory."

As clouds of uncertainty gathered over the U.S. economy earlier this year, the semiconductor specialist had trimmed its third-quarter guidance in September, citing weakening demand for its products.

TI, which counts Apple (AAPL - Get Report), Motorola (MMI), LG and Samsung among its customers, eventually saw its revenue come in higher than expected but still below the seasonal average.

Up-and-coming chip supplier TriQuint (TQNT) agrees with March's assessment of the IT spending climate.

"I think that we could be coming to the bottom," explained Ralph Quinsey, the TriQuint CEO. "This is based on feedback from customers with regard to getting their inventory back in control and healthier forecasts from the network side of our business."

TriQuint's recent fiscal third-quarter results came in slightly better than the company's guidance, with mobile device revenue up 14% year over year. Revenue from components for optical networks and telecom base stations, though, dipped 3% over the same period.

Like March, Quinsey told TheStreet that, even with the spending slowdown starting to bottom, it's tough to predict the upturn. " I am not sure when we're coming out," he said.

No stranger to the vagaries of the economy, the semi sector has certainly felt the burn during previous IT spending slowdowns, although recent quarterly results are cause for optimism. AMD (AMD - Get Report), for example, swung to a profit in its third-quarter results, released last week, citing strong demand for its mobile processors.
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