Texas Instruments is shifting its chip business away from smartphones and tablets to more industrial segments such as the automotive. The company has faced increasing competition from companies like Qualcomm (NASDAQ:QCOM) and has also lost ground to smartphone makers such as Apple (NASDAQ:AAPL) and Samsung, which have been developing their own chips.
TI has already started to expand sales of its OMAP platform beyond smartphones to industrial users. The shift in focus will put TI in the running with Freescale, another chip-maker that moved away from smartphones three years ago.
TI's Senior Vice President for Embedded Processing Greg Delagi told investors of the move during an investor meeting yesterday. Delagi said that the company's research and development profile for OMAP "needs to look different." However, he also noted that OMAP's growth in the embedded product market will be slower than the wireless business but he declined to provide specifics on how this shift will impact TI's financials.
Delagi said that TI expects its embedded processor and wireless chip business to generate gross margins in the range of 55 percent to 60 percent and operating margins of about 30 percent.
In July, TI warned that its third-quarter revenue would be weaker than usual for this time of year as global economic uncertainties cause customers to be more cautious.
- see this Reuters article
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