Brokerages cut Texas Instruments price targets

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(Global Markets) - Atleast seven brokerages cut their price targets on Texas Instruments (TXN.N), a day after the No. 3 chipmaker cut its outlook for the current quarter and warned of lower demand as customers reduce their inventories.

Shares of the company, which makes chips for products ranging from cellphones to industrial equipment, were down 4 percent in early trade on Friday. They were trading down at $28.58 on Friday on the New York Stock Exchange.

The declines in TI's product lines have been larger than expected due to the macro environment, although OMAP -- a category of chip system used for portable and mobile multimedia applications -- continues to be strong, Needham analyst Vernon Essi wrote in a note.

The company's OMAP application processor is a current bright spot as design wins in the Samsung Galaxy Nexus and S2 (005930.KS), Motorola Droid Bionic (MMI.N), Amazon Kindle Fire (AMZN.O), and Barnes & Noble Nook (BKS.N) are buoying sales, FBR Capital Markets said.

Sales of TI's chips used in personal computers are down in the current (fourth) quarter, partly due to a shortage of hard-drives caused by recent flooding in Thailand.

"We continue to expect a seasonally weak first quarter likely marking the trough of the semiconductor cycle," Wedbush analysts wrote in a note.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Supriya Kurane)