Cloud Computing? Texas Instruments Says Think Powerless Computing

Texas Instruments (TXN) considers the near term pretty bleak. But the future? Try computers and electronics that can function with little or no power. From TI's Q408 conference call:

No end in sight:

We are not anticipating that we're at a bottom. We think that the economy is shaping up to be... probably the worst one that most of us have experienced in our working lives. With the contraction of credit going on in the economy, we expect that will probably cause a smaller global economy as well as a U.S. economy in 2009 and so we're taking actions to get ready for that. We are not anticipating an upturn any time on the horizon.

Cutting R&D:

In the end, about 50% of the annualized savings will be in R&D, about 30% in SG&A and 20% in cost of revenue.

Merchant wireless (See last quarter’s excerpt on merchant wireless here):

We are not selling the merchant base band business. We decided that based upon our discussions last quarter with potential buyers that it is more financially worthwhile for our stockholders if we just run that internally as an end of life business.

As far as our outlook for wireless, that has not changed… Clearly our view of the growth opportunity in that market has changed from the perspective of you're just not going to see going forward the same kind of unit growth in hand sets that we saw in the past.

If a major customer with a significant opportunity would like to pursue custom opportunities in base band with TI, we're totally open to that type of engagement. [But] I don't believe you'll see us reversing course and laying down a significant investment to try and grow the merchant business.

The future of technology:

So where do we see revenue growth coming? Certainly Analog… Embedded processing … Analog declined at a considerably smaller rate than what wireless did and so proportionately will become a large piece of TI at a faster pace just because those markets tend to operate differently.

Q: Given the restructuring in R&D… Are there particular areas that will get more of the remaining R&D dollars?

A: I think the focus… is trying to develop products that can help facilitate such things as low power, ultra low power and even no power kinds of requirements both in microcontrollers and DSP's and markets where they can be used at such as medical, security, other kinds of emerging markets… We have a product line called MSB430. It is by far the lowest power microcontroller in its space and that's actually be a big factor in terms of what's been a very attractive growth rate on that product line.

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