Texas Instruments (NYSE: TXN) says fourth-quarter revenue will be lower than expected, thanks to weakness in all markets — except mobile. “The reductions are due to broadly lower demand across a wide range of markets, customers and products, except for wireless applications processors,” the Dallas-based company said.
Success in the wireless market has been a key differentiator for chipmakers this year, as companies that have a strong presence have posted markedly better results than their competitors. The largest semiconductor maker, Intel (Nasdaq: INTC), is not yet a big supplier to smartphone and tablet makers (although an Android phone powered by Intel is expected in the first half of 2012), but Intel profits from wireless through its Intel Mobile Communications business. CEO Paul Otellini announced the company’s record third-quarter results last month, saying chips for notebooks are still the driver but adding, “We also saw continued strength in the data center fueled by the ongoing growth of mobile and cloud computing.”
Qualcomm (Nasdaq: QCOM) is another chipmaker that is bucking the downward trend by focusing on mobile. The company recently closed its 2011 fiscal year with a 31% increase in profit. Qualcomm makes chips for several Android smartphones, as well as for Nokia’s Windows 7.5 phones (Lumia 710 and Lumia 800). Qualcomm also makes the baseband processor for the iPhone 4S.
Other semiconductor makers have had a more difficult year. Samsung recently reported third-quarter profit margins fell almost 50%, from 32.1% a year ago to 16.8% for the most recent quarter. Toshiba has been hurt by the strong yen and by Japan’s earthquake and tsunami. And Advanced Micro Devices (NYSE: AMD) recently announced a major restructuring that is part of an effort to increase its focus on mobile.
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