On Tuesday, US Eastern Time, Texas Instruments (TI), an analog chip giant, announced its financial report for the fourth quarter of 2023.
The financial report shows that with an increase in automotive chip inventories and initial signs of weak demand in the automotive industry, Texas Instruments' performance in the previous quarter and its forecast for the new quarter fell short of market expectations. This resulted in a significant decline in the company's stock price after market hours.
Texas Instruments financial report shows that,
In the fourth quarter of last year, the revenue was 4.08 billion US dollars, a year-on-year decrease of 13%, slightly lower than the analyst's expected 4.12 billion US dollars;
The net profit in the fourth quarter of last year was 1.37 billion US dollars, with a profit per share of 1.49 US dollars, a year-on-year decrease of 30%.
Texas Instruments predicts that,
The first quarter revenue was between $3.45-3.75 billion, which was lower than the average analyst estimate of $4.06 billion.
The first quarter earnings per share ranged from 96 cents to $1.16, which was also lower than analysts' expectations of $1.41.
As of the time of publication, Texas Instruments fell by about 4.3% after trading.
As the world's largest analog chip giant, Texas Instruments' largest revenue segment mainly comes from sales of electronic devices to the industrial machinery and automotive industries.
Despite the continuous decline in the chip market in the past two years, automotive chips have always been a sector with strong demand in the chip market. But with global central banks such as the Federal Reserve raising interest rates significantly, high borrowing costs have suppressed the demand for the automotive industry in the end market, and the situation faced by automotive chip manufacturers has become increasingly difficult.
Car shopping website Edmunds predicts that new car sales in the United States will only grow by 1% in 2024.
Autonomous driving technology giant Mobileye recently predicted that its initial revenue in 2024 will be lower than expected, with a decrease in customer orders to clear excess inventory. This further indicates that in the crisis of oversupply, the automotive chip industry may become increasingly sluggish.
Meanwhile, as global manufacturing activities remain weak, demand for industrial machinery, another major customer of Texas Instruments, has also weakened.
A survey by the Institute for Supply Management (ISM) in the United States showed that as of November last year, industrial activity indicators in the US manufacturing industry remained sluggish, with factory employment further declining as recruitment slowed and layoffs increased.
TSMC, the world's largest chip foundry, has recently warned that there may be an overcapacity in the manufacturing of analog chips.
Texas Instruments has the longest customer list and richest product categories in the chip industry, so its financial forecasts often reflect the health status of the entire semiconductor industry and even multiple macroeconomic sectors, and are therefore seen as a "barometer".
However, the company's current outlook forecast is not optimistic, which may be an ominous sign for the broader market.