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TI's Engibous Outlines Company's Strategic Direction At Annual Cowen Electronics Conference

SCOTTSDALE, Ariz., Nov. 21 /PRNewswire/ -- Texas Instruments (NYSE: TXN) plans to accelerate its strategy to provide value-added "digital solutions" for its customers, while gaining a greater share of its revenues from differentiated products.

The company's strategic direction was outlined here today at the 16th Annual Cowen and Company Electronics Conference by Thomas J. (Tom) Engibous, TI president and chief executive officer. Digital signal processing solutions, or DSPS, will be a focal point of the company's strategy.

In his presentation, Mr. Engibous highlighted three key elements that will drive the company's strategic direction and play a significant role in shaping the company's future -- value, stability and higher growth.

Value

TI plans to leverage its market leadership in digital signal processing to create a higher mix of value-added solutions that provide sustainable differentiation in its product and business portfolio. This, in turn, will provide competitive advantage for TI's customers. Mr. Engibous also said that TI's recently announced TImeline Technology will enable the company to speed the move to fully integrated "systems-on-a-chip," ultimately providing much higher performance at a lower cost of ownership.

The current digital revolution that is happening across virtually all electronic end equipment will continue to be driven by a DSP "engine." DSPs are specialized chips that handle sounds, images and data at blazingly high speeds, often 10 times faster than the most powerful general-purpose microprocessors.

TI combines DSPs with mixed-signal chips, software and systems knowledge to develop custom digital signal processing solutions (DSPS) for leading manufacturers of cellular telephones, modems and hard disk drives, among others.

Through the first three quarters of 1996, TI has generated $283 million in net income, excluding the charges related to the acquisition of Silicon Systems, Inc. These results were achieved amidst a price drop in dynamic random access memory (DRAM) chips that is greater than either of the prior cycles in 1985 and 1990/91. The single largest difference in today's results is the growing success of TI's DSP solutions business.

Mr. Engibous said that TI's semiconductor business is focusing its DSP solutions development on wireless communications, networking and mass storage devices, because they offer greater growth opportunity than the overall semiconductor market, and because this approach has potential to generate higher operating margins through proprietary, long-term customer relationships.

Stability

The second major element of TI's strategic direction is to add stability and reduce uncertainty in its business, according to Mr. Engibous. One such approach is through the company's joint ventures, which help reduce the impact of volatility in the memory market on TI.

"We are not yet satisfied with our exposure to this volatile side of the semiconductor market," Mr. Engibous said. "We are determined to reduce the effect of this market volatility on TI, and we'll continue to work with our JV partners to find the best possible solution."

Another factor that promotes stability is geographic diversification. Mr. Engibous noted that during the last decade, TI moved from a heavy concentration of revenues from the US and European markets, to a geographically balanced mix, which is well aligned with the worldwide market.

"We now have the world's best geographic coverage of the semiconductor market, with about two-thirds of our semiconductor revenue from outside the United States in 1995," said Mr. Engibous.

Higher-Growth

The third element of TI's strategy targets high-growth markets. By offering advanced solutions, Mr. Engibous said that TI can drive the growth of markets that have high potential and offer the greatest return. Networked computing, wireless communications and mass storage applications are three such opportunities.

Network connections in businesses and homes, for example, are expected to double by the year 2000, driven heavily by e-mail, the Internet and the need to share information between remote locations. TI is leading the way in DSP solutions that interface to office networks, and will announce more products in this area in 1997 than ever before.

The acceleration of digital data into the home is another key trend. TI recently announced a new class of DSP solution that will allow the television set-top box to become much more than a channel changer -- consumers will be able to use their set-topboxes to "surf" the Worldwide Web, shop from home, and receive improved program guides for hundreds of channels.

The semiconductor market for wireless communications is expected to grow from $3.5 billion in 1996 to about $9.5 billion in 2001. Growth in cellular phones is increasing rapidly, with more of them shifting to digital technology. This is one of the reasons TI is seeing more than 30 percent growth for wireless DSPs.

Mass storage is another high-growth market where TI is well-positioned, with the largest growth in hard disk drives, CD ROM and digital video disks, or DVDs. Recent projections by market researcher International Data Corp. (IDC) indicate that hard disk drive shipments will increase to 231 million in the year 2000, up from 89 million units in 1995. IDC also projects a near 300 percent increase in CD ROM shipments during that same time.

Mr. Engibous concluded, "While we have faced a difficult memory market environment in 1996, TI remains committed to the vision of 'world leadership in digital solutions for the networked society.' We continue to be more positive than ever about the opportunities ahead and our position as the leading digital solutions company."

The complete text of Mr. Engibous' speech is located on the World Wide Web at http://www.ti.com.

Texas Instruments Incorporated, headquartered in Dallas, Texas, is one of the world's foremost high technology companies, with sales or manufacturing operations in more than 30 countries. TI products and services include semiconductors; defense electronics systems; software productivity tools; mobile computing products and consumer electronics products; electrical controls; and metallurgical materials.

SOURCE Texas Instruments
 -0- 11/21/96


/NOTE TO EDITORS: Please do not publish contact phone number./

/CONTACT: Neil McGlone of Texas Instruments, 972-995-4961/

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