TI Sees Revenue Loss in Q1, Q2 After Japan Plant Damage, Shares Fall

Chip maker Texas Instruments Inc. (NYSE: TXN) said it expects loss of revenue in the first quarter and second quarter as the Japan earthquake caused substantial damage to its Miho plant in the country.

The Miho plant that lies about 40 miles northwest of Tokyo accounted for about 10 percent of the company's output.

..the company expects some loss of revenue in the first quarter and more lost revenue in the second quarter, TI said in a statement.

Dallas, Texas-based Texas Instruments (TI), which expects to incur recovery charges in the first and second quarter, would describe financial impact in detail when it reports its first-quarter earnings on April 18.

The 8.9 magnitude earthquake damaged the Miho plant's infrastructure systems and work-in-progress, while the damage to manufacturing equipment is not known until availability of continuous power. However, TI said Miho building itself suffered little damage and remains structurally sound.

The company expects to reinstate production in stages, beginning with several lines in May and returning the factory to full production in mid-July, which translates to full shipment capability in September.

This schedule could be delayed if the region's power grid is unstable or if further complications prevent the re-start of equipment, the company said in a statement.

TI is moving quickly to shift production to other fabs and so far has identified alternate manufacturing sites for about 60 percent of Miho's wafer production. Work is underway to increase this percentage by moving the production of additional products.

Meanwhile, TI's fab in Aizu-wakamatsu, about 150 miles north of Tokyo, also was damaged in the earthquake, though equipment there already is being re-started and full production is estimated by mid-April, assuming a stable power supply.

However, the company's third plant in Hiji, about 500 miles south of Tokyo, was not damaged and is currently running at normal capacity.

Shares of Texas Instruments closed Monday's regular trading session at $34.56 on the NYSE. In the after-hours trading, the shares fell 71 cents, or 2.05 percent, to $33.85.