TI posted a net loss of $116 million, or $0.07 per share, in the fourth quarter. A year ago, TI reported a net income $665 million, or $0.37 per share, in Q4 of 2000, when it had $3.03 billion revenues. TI's net loss was $117 million in Q3 of 2001.

The Dallas-based company predicted that its revenues will be sequentially flat in the first quarter of 2001. TI also said it was cutting capital spending to $800 million in 2002, a 56% decrease from last year's $1.8 billion. TI's R&D expenditures have been set at $1.5 billion for 2002, the same as last year.

While 2001 was a "tough year," TI chairman and CEO Tom Engibous said, "it ended on a much more positive note than it started." He cited TI's shipment of 600-MHz digital signal processors as well as the company's first copper-based products and the ramp of 0.13-micron processes. He said TI also installed its first 300-mm wafer processing line.

"At the same time, we maintained a strong balance sheet, and our actions cut about $600 million out of TI's costs on an annualized basis," said the chief executive officer. "As the market recovers, TI's revenue growth should fall through to the bottom line at a high rate."

TI semiconductor revenue dropped to $1.5 billion, down 44% from the year-ago but 3% higher than the Q3 on the strength of DSP products, according to the company. For the entire year, TI's semiconductor sales were down 34% to $6.78 billion from revenues in 2000.

The company said its semiconductor operating loss for the fourth quarter was $204 million, or -13.6% of revenue, which was a result of low manufacturing capacity utilization rates. The loss was a slight improvement over -$219 million in Q3. In the fourth quarter 2000, TI's semiconductor business had an operating profit of $679 million.

TI's factory utilization rate is now just over 50%, giving the company plenty of room for production capacity in 2002 without significant investments, said Bill Aylesworth, senior vice president and chief financial officer. TI's capacity utilization in Q3 was about 45%, he told analysts during a conference call with analysts today.

In the conference call, Aylesworth said most of the $800 million in capital spending will be used for "technology enhancements" after TI completed the installation of its first 300-mm frontend and the conversion of three analog fabs to 200-mm wafers in 2001. TI expects to be moving its 300-mm DMOS6 fab in Dallas into initial production during the first half of 2002, he said.

Fourth-quarter analog chip revenues were sequentially even with the third quarter, while DSP sales were 10% higher that the previous quarter, TI said. In 2001, about 40% of TI's total semiconductor sales were in analog circuits, while 25% of the company's chip revenues last year were from DSP products.

TI's wireless chip revenues increased sequentially by 9% from the third quarter. About 20% of TI's semiconductor revenues came from wireless applications. Meanwhile, revenues from broadband communications ICs grew sequentially 40% from the prior quarter, but this segment was 67% lower than Q4 of 2000. TI said about 5% of its chip sales come from broadband communications.

The company's semiconductor orders totaled $1.30 billion in the fourth quarter, compared to $2.45 billion in Q4 of 2002. Sequentially, orders were flat with the Q3 of 2001.