Texas Instruments, Foundries Beginning to Understand the Excess Inventory Issues

It seems like less than two weeks ago that Texas Instruments (TXN) said there wasn’t a serious problem with excess inventory. Now, they say they are cutting back capacity in a big way. From the earnings update conference call:

We reduced production loadings at both our internal factories and at our foundry suppliers. Having a significant part of TI’s production sourced at third party foundries is providing a significant buffer to our profit margins as revenue declines and we adjust production.

TXN 1-yr chart:

Gee. Back in June the foundries said not to worry about inventory either. Whatever will they do with all the excess equipment they have been ordering?