US chipmaker Texas Instruments’ forecast signals semiconductor slump is persisting

US semiconductor giant Texas Instruments gave a disappointing earnings forecast for the current period, hurt by still-sluggish chip demand and higher manufacturing costs.

Profit will be 94 cents to US$1.16 a share in the first quarter, the company said in a statement on Thursday. The midpoint of that range, US$1.05 a share, was well below the US$1.17 that analysts projected on average. Sales will be US$3.74 billion to US$4.06 billion, compared with an estimate of US$3.86 billion.

Much of the electronics industry remains mired in a slump – contributing to nine straight quarters of sales declines at the company. Manufacturing expenses also have affected profit, Texas Instruments executives said.

The Dallas-based company gets the biggest portion of its sales from manufacturers of industrial equipment and vehicles, making its projections a bellwether for much of the global economy.

Three months ago, Texas Instruments executives said some of the firm’s end markets were showing signs of emerging from an inventory glut, but the rebound has not come as quickly as some investors anticipated.

The company’s shares slipped about 3 per cent in extended trading after the announcement. The stock had gained about 7 per cent this year through the close of regular trading.