Texas Instruments (TI) has announced that it is winding down its mobile processor business. The firm will shed 1,700 jobs, which is about five per cent of the company’s global workforce. Rather than just quit the business of mobile and tablet chips immediately following this announcement TI will continue to sell its existing line of processors to customers like Amazon, who use a TI processor in some Kindle devices, for as long as the demand is there. However research and development into these kinds of chips will now cease.
Competition from Qualcomm, NVIDIA, Samsung and Apple is cited as being too hot for TI to handle. Now TI’s plan is to concentrate on processor production for “more profitable markets” like in cars, robotics, health monitors and home appliances. On Wednesday Greg Delagi, TI's senior vice president of embedded processing explained that “Momentum is already building with new embedded applications and a broad set of customers, and we are accelerating our efforts in these areas”. Referring to the proposed job losses Mr Delagi said “These job reductions are something we do with a heavy heart because they impact people we care deeply about”.
The mobile division of OMAP could be sold, according to some Wall Street analysts and reports last month, to Amazon. That would be the favoured course of action as the job cuts and other cost reduction measures planned will bring about costs of approximately $325 million according to Reuters. Whatever happens, the cuts are expected to save $450 million per annum so the plan will not take long to show rewards on TI’s balance sheet.
The current model of Kindle Fire HD is powered by a TI OMAP 4 processor and it is expected the next model will pack an OMAP 5. Luckily it seems like the OMAP 5 is “well along to completion and we do not expect that the termination of OMAP will disrupt those (Amazon Kindle) plans” an analyst said, speaking to Reuters.