The Dallas, Texas-based chip maker reported an operating profit of US$840 million, 40% up from the previous quarter on revenues of US$3.39 billion, which were 2% up quarter-on-quarter, too.
Year-on-year, however, revenues were 2% down, and the operating profits were juts 3% up, reflecting macro-economic woes and tepid consumer demand across the world.
Embedded processing and analog solution chip businesses performed relatively well, staying profitable, compared with its digital wireless chip business that bled red ink.
Propelled by booming shipments of high volume logic and analog as well as power management chips, analog chip business netted an operating profit of US$460 million, 5% up quarter-on-quarter, on revenues of US$1.843 billion, up 2% quarter-on-quarter.
Year-on-year, however, TI's analog chip business performed far better, chalking up an 18% jump in the operating profits and an 11% increase in revenues.
Biggest Performer
Embedded processing business was also up 24% sequentially to reach S$63 million in the third quarter operating profit on sales of US$520 million, 2% up sequentially. Year-on-year, however, its operating profit was almost halved, mainly due to plunges in the sales to communications infrastructure markets.
TI’s embedded processing business sell DSPs as well as MCU catalog products mainly for communications infrastructure and automotive markets.
To take up the setbacks in the communications market, TI is now raising its ante into the automotive market.
"TI revenue grew sequentially and operations were well executed even though the economy and semiconductor market remained weak and likely will get weaker in the fourth quarter," said Rich Templeton, TI's chairman, president and CEO. "Our core businesses of Analog and Embedded Processing each grew revenue by 2 %. Our operations were disciplined, with expenses and inventory levels both down, and our core businesses grew profit faster than revenue."
Adde he, "These two core businesses now comprise 70% of our revenue. The importance of this strategy shows in the strong cash that we generate even in weak markets and in our ability to return that cash to shareholders.”
Once its biggest cash crop, the wireless chip business, which includes flagship OMAP and baseband modem chips, posted an operating loss of US$53 million on revenue of US$325 million, which was 5% down quarter-on-quarter and 44% year-on-year. .
The main culprits for the third quarter loss were declines in the shipments of baseband modem chips for mobile cellular communications and wireless connectivity solutions. Shipments of its OMAP processors increased year-on-year, TI said.