July 27, 2023 /SemiMedia/ -- According to Reuters, Texas Instruments (TI) forecast that revenue and profit in the third quarter of 2023 will be lower than the target due to the slow recovery of demand in the end market and the cancellation of orders by customers.

While TI topped expectations for revenue and profit in the second quarter, inflation and rising interest rates ate into spending across segments, including its major markets, industrial unit, which accounts for about 40% of its revenue. Currently, all end markets except automotive are weak.

Dave Pahl, TI's director of investor relations, said: "Order cancellations remain at high levels, and we believe customers are continuing to reduce inventory to better match their needs."

"As of the end of fiscal 2022, the Chinese market accounts for about half of sales, so the Chinese market has the greatest impact on TI's business," the analyst said.

Despite the demand crisis, Texas Instruments said it would continue to increase supply, even at the expense of profit margins, to support long-term demand and create geopolitically reliable capacity.