Smartphones Help Boost Texas Instruments Q3 Guidance

Chip giant Texas Instruments (TI) raised its revenue and profit estimates for the third-quarter on Wednesday on improved demand for a range of chips, including those used in smartphones.

Demand for the company's power chips used in notebook computers, consumer products and mobile phones has been one of the main contributors to growth in the third-quarter while strength in analog chips for hard disk drives, personal navigation devices and video game consoles has also helped, said Ron Slaymaker, a vice president at TI, during a conference call.

"Wireless growth is being led by strong gains in the connectivity product area and these are products that for the most part we sell into smartphones," he added.

The company increased its revenue forecast for the third-quarter by about US$150 million over its guidance given in July to a range of $2.73 billion to $2.87 billion. TI also raised its earnings per share estimate to a range of $0.37 to $0.41 versus a range of $0.29 to $0.39 previously.

"The reality is that we are expecting stronger revenue now in the third quarter in every one of our segments than in July," Slaymaker said.

The guidance increase marks the third time this year TI has raised its quarterly guidance ahead of actual earnings reporting. The global recession has made companies cautious about predicting their financial future.

Other high profile chip makers have also raised their third-quarter guidance recently, further signs the global economy continues to strengthen. A few weeks ago, microprocessor maker Intel raised its third-quarter revenue guidance to US$9 billion, plus or minus $200 million, compared to its previous guidance of $8.5 billion, plus or minus $400 million, fueling hopes the computer sector is bouncing back from the recession.

The third-quarter ends Sep. 30.

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