Texas Instruments saw first quarter profit tumble by 97% on sales that were 36% down on the first quarter last year.
On the positive side the company said it had reduced its inventory by $277m and had also knocked some $132m worth of TI inventory out of the distribution channel.
“Our inventory reductions are essentially complete, and we expect to moderately increase production levels in our factories during the second quarter," said Rich Templeton, TI’s CEO and president.
Templeton said there were signs that demand for chips was stabilising after sharp drops in the past two quarters. “Many customers have increased orders for TI products as they have begun to slow down their inventory reductions,” said Templeton.
“However,” said Templeton, “we remain sensitive to continuing weakness in the global economy, and we have yet to see signs of a broad-based recovery in our business."
First quarter revenues were $2.09bn and net income of $17m.
Excluding restructuring charges of $105m, operating profit was $115m in the first quarter, which was 5.5% of revenue.
TI continues to invest in the business and in Q1 it acquired Ciclon Semiconductor, a power management IC supplier.