Feeling Chipper

Global sales of computer chips are expected to hit $163 billion in the second half of this year, and Texas Instruments is in line for a fair share of that spending, according to market research firm iSuppli.

Analog semiconductors, the devices upon which Dallas-based TI has hung its hat, should see 22 percent market share growth in the second half of this year, said Dale Ford, senior vice president at California-based iSuppli. Analog chips convert real-world phenomena, such as temperature, into the ones and zeros that computers understand.

Improved consumer spending, a rise in chip prices as demand has outstripped supply, and the growth of devices like smartphones and advanced television sets are propelling profits for chip companies.

The head of another research firm, however, sees a challenge on the horizon.

Bill McClean, president of the Scottsdale, Arizona, market research firm IC Insights, said the industry is overheated and there “need to be some adjustments” in how many chips are being made. Analog chips are one area in which adjustments are necessary, McClean said.

McClean added that the challenge is not severe. “This is a temporary problem that will be solved by the first quarter of 2011,” he said.

TI expects third-quarter revenue of between $3.55 billion and $3.85 billion, up from $2.88 billion in the previous July-September period.

For more on how Texas Instruments stands to benefit from the boom in the chip sector, click here for the full story from the Dallas Business Journal (subscription required).