TI cuts Q1 sales forecast

Decling DLP demand

Texas Instruments has cut its Q1 FY2005 upper revenue forecast on the back for falling demand for its Digital Light Processing (DLP) display technology.

Previously pegged at $2.90-3.14bn, Q1's revenue will come in at $2.91-3.03bn, TI said yesterday. Earnings are now expected to range from 22 to 24 cents a share, down from TI's earlier forecast of 22-26 cents a share.

TIexpects semiconductor revenue to come in at $2.55-2.65bn, compared to the previous forecast of of $2.55-2.75bn.

TI blamed falling demand for DLP products for the shortfall. While it reckons DLP's share of the high-end TV market grew last year, sales did not meet display manufacturers' expectations toward the end of 2004. That in turn saw them reduce their orders for DLP components from TI during the first three months of 2005, hence the Q1 FY2005 dip.

TI also noted the impact of the sale of its commodity LCD operation to Oki.

TI's announcement follows Intel's announcement last October that it had canned its own digital display project based on Liquid Crystal on Silicon (LCoS) technology, which would have competed with DLP. Philips also decided to end sales of its own LCoS TVs during October 2004, blaming the technology's failure to capture a suitable share of the high-end, large-format TV market. Put simply, LCD and plasma have the volume sales and consequent price advantage, even if they may not offer the display quality of DLP or LCoS.

TI reported sales of $3.15bn during Q4 FY2004, down three per cent on the previous quarter. Net income for the quarter came to $490m (28 cents a share), down 13 per cent from $563m (32 cents a share) in the Q3. ®

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