A climber descending into a darkened cave wants to reach the bottom before he runs out of rope. It is the same for semiconductor companies. Texas Instruments has joined the roll-call of chipmakers that have again had to downgrade expectations. It indicated that fourth quarter revenues will be 26-32 per cent lower than those of the previous quarter. Similar in magnitude to revised forecasts from peers such as AMD and TSMC, it makes guidance from Intel, released just weeks ago, look optimistic.

The problems are twofold. First, consumer spending has collapsed. Taiwanese computer makers are bracing themselves for desktop sales down by a quarter in the final three months of the year, reckons Bank of America. So, as they adjust along with other manufacturers of consumer electronics, this creates the second effect – shrinking inventories. Texas Instruments is shipping chips at a rate below that of underlying demand.