On October 26, Texas Instruments announced its financial results for the third quarter of fiscal 2022. According to the financial report, Texas Instruments’ Q3 revenue was US$5.241 billion, a year-on-year increase of 13%, which was better than analysts’ expectations of US$5.14 billion. Revenue increased by double-digit percentages for seven consecutive quarters; net profit was US$2.295 billion, a year-on-year increase. 18%.

However, the company expects fourth-quarter revenue of $4.4 billion to $4.8 billion, below analysts' average forecast of $4.93 billion; fourth-quarter profit is expected to be $1.83 to $2.11 per share, also below expectations.

It is not difficult to find that automobile and industrial machinery manufacturers contribute more than 60% of Texas Instruments' revenue, and from the latest forecast of Texas Instruments, some industrial machinery manufacturers' customers are just like computer and mobile phone manufacturers. Orders are slowing down, Demand is still strong at the moment, leaving only the automotive market.

"During the quarter, we experienced expected weakness in the personal electronics segment, as well as expanding weakness across the industrial segment," Chief Executive Officer Rich Templeton said in a statement. As the quarter progressed, the order situation was deteriorating and cancellations were increasing.

Given that Texas Instruments has the most extensive customer list in the semiconductor industry, and its chips are used in everything from household appliances to missiles, the company is also considered a barometer of the semiconductor industry, and its performance forecast is also a measure of overall economic demand. reference indicator.

Many of the industry's biggest names, including Samsung Electronics, Intel and Nvidia, have previously warned that demand for chips is falling sharply. For investors, the biggest focus right now is when the industry is nearing a bottom.

It is reported that the Philadelphia Semiconductor Index has fallen by 40% in 2022. However, as of Tuesday, the index had risen for seven straight days, suggesting investors believe the industry may have bottomed.

However, Texas Instruments executives may not be so optimistic. Rafael Lizardi, the company's chief financial officer, said it was difficult to tell whether the current drop in demand was simply a reduction of customers' inventories or increased concerns about the economy. Even putting aside the growing risk of recession, even if the economy stabilizes, the cyclical nature of semiconductors remains, "I wouldn't be surprised if customers have accumulated too much inventory over the past two years."

Therefore, this also means that the bottom of the semiconductor industry may not yet come. And, despite TI's claims that auto industry chip demand remains strong, Summit Insights Group analyst Kinngai Chan noted that many automakers are ordering twice as many chips as needed and expects auto chip demand to slip to pre-pandemic levels in the first half of next year s level.

In fact, last week, Susquehanna Financial Group's latest report also showed that semiconductor delivery in September was shortened by 4 days, the largest drop in years, indicating that the industry supply crisis is easing.

Lead times from order to delivery averaged 26.3 weeks in September, according to a study by Susquehanna Financial Group. By comparison, August was nearly 27 weeks. In addition, lead times have been shortened for the fifth consecutive month.

Overall, a global shortage of chips has plagued many industries for more than a year, with automakers and other manufacturers struggling to get enough semiconductors. While current supply constraints remain, many chip makers now have to start worrying about another problem, namely excessive chip inventories.