Microchip maker Texas Instruments Incorporated (TXN) late Wednesday said its would eliminate some 1,700 jobs as part of a wider plan to abandon its mobile processor business.
The Dallas-based company instead intends to focus on less competitive markets like developing chips for autos and home appliances.
TXN has encountered difficulties in the growing mobile chip market, facing stiff competition from companies like Qualcomm (QCOM). Some top mobile device makers like Apple (AAPL) and Samsung have even been developing their own chips rather than relying on companies like Texas Instruments to engineer them.
The 1,700 job cuts represent about 5% of the company’s global workforce.
Recent rumors have indicated T.I. is interested in selling part of its mobile processor business, called OMAP. One potential buyer is Amazon.com (AMZN), which uses OMAP processors in its highly successful Kindle devices. TXN said it will continue to supply its customers with chips for as long as demand remains, but will no longer develop new chips for mobile devices.
Texas Instruments shares posted modest gains in premarket trading Thursday.
The Bottom Line
Shares of Texas Instruments (TXN) have a 2.92% dividend yield, based on last night’s closing stock price of $28.76. The stock has technical support in the $26-$27 price area. If the shares can firm up, we see overhead resistance around the $30-$31 price levels.
Texas Instruments Incorporated (TXN) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.