(Reuters) – Texas Instruments forecast second-quarter revenue below Wall Street estimates on Tuesday on worries overstocked customers will either push out or cancel orders amid slowing demand across most of the analog chipmaker’s end markets.
A chip supply glut, which started from the consumer electronics market, has seeped into broader markets like enterprise and industrial as rising interest rates saps spending across the board.
For TI, which flagged this pattern in January, this marks trouble as it derives about 70% of its revenue from these markets with industrial comprising about 40%.
“During the quarter we experienced weakness across our end markets with the exception of automotive,” said CEO Haviv Ilan.
Analysts have also raised concerns that the automotive chip business, where demand has so far been resilient, will soon follow suit as rising cost of borrowing is hurting auto sales.
The company forecast revenue in the current quarter in the range of $4.17 billion to $4.53 billion. Analysts polled by Refinitiv expect revenue to come in at $4.44 billion.
First-quarter revenue fell 11% to $4.38 billion, in line with expectations.
(Reporting by Chavi Mehta in Bengaluru; Editing by Shailesh Kuber)
