Gloomy chip makers fuel fears over US economy

Concerns over the US economy increased yesterday as two of the country's chip-makers posted gloomy forecasts for the months ahead.

Texas Instruments blamed falling demand for PCs for its disappointing financial targets, while National Semiconductor complained that consumer spending had not risen in line with expectations.

"We'd all like to believe that consumer spending is onward and upward, but I don't think it is," National Semiconductor chief executive Donald Macleod told news agency Reuters.

The company's figures for last quarter were better than expected, but the it said sales in the current period could be down by as much as five per cent.

The gloomy prediction follows a recent warning from chip giant Intel that weak demand for PCs was hampering growth.

Texas Instruments said concerns over a sluggish PC market were being exacerbated by a slower than expected TV sales, and particularly a lack of consumer interest in new 3D technology.

Demand in the industrial and wireless chip sectors led Texas Instruments' overall outlook to be more optimistic - but not enough to calm the fears of investors, as shares in the company dipped 1.4 per cent in value.

Falling demand for PCs in the wake of the release of new mobile devices such as Apple's iPad led Korean tech giant Samsung to predict a glut of conventional DRAM memory.