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Texas Instruments on Wednesday issued a more optimistic revenue and profit forecast for its fourth quarter, citing the strength of demand for its wireless semiconductors for mobile phones and its digital television chips.

TI also said it was suffering from low inventory levels that meant it was struggling to meet demand from customers, but maintained other component providers faced similar problems.

In a mid-quarter-update, the second-largest US chipmaker after Intel said revenues should be between $3.560bn and $3.705bn, compared to its prior forecast of $3.425bn to $3.715bn.

TI expected earnings per share of 38 to 40 cents, compared to the 36 to 40 cents predicted at the end of the third quarter.

Semiconductor revenues, which account for the bulk of sales, should be between $3.2bn and $3.325bn, compared to $3.075bn to $3.325bn. Sensors and controls could reach $295m to $305m, narrowing the prior range of $290m to $310m. The forecast for its Educational and Productivity Solutions division, best known for TI’s calculators, narrowed from $60m to $80m to $65m to $75m.

“We are seeing strength in a range of areas, wireless is running ahead of expectations, as is DLP [television chips] and high-performance analog [chips],” Ron Slaymaker, investor relations head, told an analysts’ conference call.

But the company’s inventories were lower than desirable and its operations were stretched, he added.

“I can’t say we’re completely meeting customer demand, but you’ve got many other component companies in the same situation. It could be that if we did ship more, customers might not be able to use [the inventory] because they don’t have the other components they need.”

Xilinx, which makes chips for digital cameras and high-definition televisions, also increased its forecasts yesterday for its current quarter, reporting stronger-than-expected demand in North America and Asia.

Intel will issue its mid-quarter update later today [Thu], with analysts expecting it to raise its existing fourth-quarter guidance of $10.2bn to $10.8bn in revenues, helped by increased demand last month for both its notebook and desktop PC processors.

The Semiconductor Industry Association said on Friday that strong demand for consumer electronics drove worldwide chip sales to $20bn in October, up 6.75 per cent on a year earlier.

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