Wireless bellwether Texas Instruments said device makers have begun ordering its silicon once again as they’ve plowed through their inventories and are ready to start building new phones. In TI’s first-quarter earnings call Monday, CEO Rich Templeton said that pick-up in orders, by no means, signaled an end to the handset sector’s troubles, but those troubles don’t appear to be mounting.
Orders for TI’s chipsets, which power a good deal of the world’s mobile phones, had been falling rapidly for the previous two quarters as the handset industry went into lock-down. Carrier orders and retailer sales dropped as the global recession took hold, which in turn led handset makers to cut component purchases as they tried to unload the inventories on hand. Last week, the first sign of that trend hitting bottom emerged with Nokia’s first quarter results. Though Nokia had an awful quarter, with profits falling 90%, CEO Olli-Pekka Kallasvuo said that operators and retailers had sold off the majority of their inventories, which would lead to more orders and–hopefully–a less volatile second quarter. TI, Nokia’s largest chip supplier, is likely seeing the first evidence of this as Nokia ordered the components last quarter to make devices for the current quarter.
Still, TI is being cautious. While Templeton said the market has begun to stabilize, he wasn’t willing to say the worst is behind TI. “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,” he said.