A supply-and-demand imbalance is hitting semiconductor companies' revenues and profits. But not every company is hurting in the same place.

Two companies feeling the pain in different ways are

Texas Instruments

(TXN) - Get Report

and

Micron Technology

(MU) - Get Report

-- Texas Instruments in the deteriorating

cell-phone market and Micron through lower memory prices.

Texas Instruments

said Monday that declining demand -- across the board -- means revenue will fall about 20% in the first quarter from the fourth quarter, not the 10% decline it

forecast earlier this year. The company had $3.03 billion in fourth-quarter revenue. At the same time, Texas Instruments said stable pricing and cost cuts would mean that operating profit margins would decline only by six to eight percentage points.

Meanwhile, Micron, a maker of DRAM, or dynamic random access memory, had its earnings outlook cut by two-thirds by

Lehman Brothers

because of the rapidly deteriorating pricing of the commodity memory it makes. Prices have fallen because demand for personal computers began to wane this fall, leaving the market with chips aplenty. (Lehman hasn't done underwriting for Micron.)

Both stocks, which have been losing ground in recent weeks on related concerns, slipped further in trading Monday. Texas Instruments finished regular trading off $1, or 3%, at $29.15, and Micron ended down $2.25, or 6%, at $35.

Pricing has become an issue for most kinds of semiconductors in the past six months as demand has softened for PCs and other electronics that employ semiconductors. In addition to the declines in DRAM prices, makers of microprocessors -- the chips that act as the brain of the personal computer -- have been battling it out for market share with

price cuts. For instance, reports of scarce flash memory, used in personal digital assistants, cell phones and PCs, have been replaced by tales of oversupply and falling prices.

This means that many semiconductor companies are going to suffer this quarter, not just from declining shipments, but also from lower per-unit revenue. The only area this may not happen in is in very specialized chips. At least that's what Texas Instruments said Monday.

"For most of our products we're seeing the effect of a revenue drop because of unit shortfall but generally stable prices and as a result we don't get that extra hit on margin," Texas Instruments Chief Financial Officer Bill Aylesworth said during a conference call Monday.

All the same, earnings estimates have fallen for Texas Instruments. Last week as word came out of a Cannes, France conference that the next generation of cell phones would be slow to catch on, wireless players including Texas Instruments saw their stocks decline. In addition, competitor

Motorola

(MOT)

on Friday

offered a dismal outlook for the cellular market in 2001, downgrading its growth outlook for semiconductors as well.

Texas Instruments is expected to earn 20 cents a share on revenue of $3.2 billion this quarter. For the year, analysts are looking for 99 cents a share. But

Merrill Lynch

Monday downgraded the stock to accumulate, setting its EPS target at 14 cents a share for the quarter. (Merrill hasn't done underwriting for TI.) (

TheStreet.com

looked at some of the problems Texas Instruments is facing on Friday.)

Meanwhile, Lehman came down hard on Micron Monday, slashing its $1.25 earnings estimate for fiscal 2001 to 35 cents. The consensus estimate, according to

First Call/Thomson Financial

, had been $1.28. For the quarter, Lehman sees Micron posting a loss of 5 cents a share, compared with a previous estimate of earnings of 8 cents a share. The consensus was 17 cents.

Lehman cites a 35% decline in DRAM spot prices over the past three months, of which 20% occurred in the last month, and a 30% to 50% drop in flash prices. Given weak demand for personal computers, Lehman's Dan Niles wrote that the inventory of the chips that go into them is actually increasing.

Thanks to the supply and demand imbalance, the downward tumble in the semiconductor sector has been severe and protracted, making the timing of the upturn much more difficult to determine. And that means that in the months ahead, Texas Instruments, Micron and all the other semiconductor companies are going to be walking a careful line as they try to balance supply and demand, while still trying to produce earnings.