TI Eyes Video to Drive Semiconductor Sales

Texas Instruments Vice President Greg Delagi holds a video micro chip board, in Dallas, Wednesday, May 17, 2006. TI Inc. has ridden the wireless wave ever since cellular phones were used only for talking to somebody else. The engineers who run Texas Instruments are trying to anticipate where the phone market is headed next, and they think they know. "Video is the next big thing," says Delagi. (AP Photo/LM Otero) (Lm Otero - AP)

Revenue and profits at TI have risen sharply for three years, since the end of the last slump in the semiconductor industry. Sales in 2005 were a record $13.39 billion and profit hit $2.32 billion, the highest level since 2000, the last hurrah of the tech boom.

TI's stock price peaked around $100 in early 2000, just before the dot-com bubble burst. Shares slid below $20 by late 2003 but have regained some ground since. They closed at $31.64 Friday on the New York Stock Exchange.

TI executives said the arrival of the video-driven age is just as certain as the rise in recent years of fancy cell phones with powerful communications and entertainment functions.

Chief Executive Richard Templeton said TI knows this by listening to gadget manufacturers who use its chips. He recalled that several years ago, Japanese phone makers wanted chips that could take high-resolution pictures and play 3D games.

"They asked us for things that we thought were crazy," Templeton said. "Here, five years later, we are ahead of the marketplace because we knew enough to let those customers drive us in that particular segment."

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