The reinvention of Texas Instruments

In an increasingly digital world, CEO Richard Templeton is pushing his company in new directions.

When Texas Instruments comes to mind, most folks still might think calculators or educational toys. That's because the chip giant has largely been a behind-the-scenes player for the last two decades.

Though it flopped at selling PCs, TI has played a major role in the cell phone revolution: the company's digital signal processors run about half the world's cell phones. It has also carved out a significant place in the digital TV market with its digital light processing (DLP) technology, digitally controlled mirrors that are inside TVs from Samsung and others. TI is now working with Hollywood to retrofit theaters for the digital era. A major announcement is expected Sept. 8.

Richard Templeton, who's worked at the company since graduating from college in 1980, became CEO last year. He recently spoke with CNET to discuss TI's rivalry with Intel, the future of electronics and why the world needs fancy cell phones.

Q: In entertainment, the music industry has made the jump to digital. How are the other segments doing in that regard?
Templeton: In home theater and digital cinema, the technology side of that is pretty much solved. If you look at a DLP-based cinema, you can put up a better looking movie; it's scratch-free, and it looks as good the hundredth time as it did the first time because the film isn't wearing out.

There has been this kind of chicken and the egg stall, though, over who will pay for the theater upgrades. We are seeing that start to get results. The theatre exhibitors are coming to agreements with some of the content people. I think you are going to actually see good growth outside of the U.S., in fact probably before you see it in the U.S.

Where else are companies using DLPs?
Templeton: Most people want to talk about TVs because that's what people can personally relate to. But the projector business is still 60 percent of our DLP business. Historically, those projectors have been the kind of thing that you would use in a conference room. But increasingly, with prices going under $1,000, you are finding those projectors ending up at home on weekends, with DVD players, Xboxes and PlayStations hooked to them.

Understanding where the market is going and participating in it are two different things.

Hewlett-Packard and Radio Shack have a product that I call home theater in a box. You can buy a single box: it's got a DVD player, the DLP projector and an audio system. You carry this home, set it on the coffee table, put a DVD inside of it and you now have on your living room wall home theater without retrofitting. It's almost a "Back to the Future." If you're old enough, you can remember when someone would put a Kodak Carousel on the table.

A couple of our customers have built handheld projectors that literally will fit the palm of your hand, weigh less than two pounds and run off a battery. You can start maybe docking a phone to that if you capture pictures on the phone and show them in a 20- to 30-inch display on the wall.

One issue that comes up with DLP TVs is size. Is there any thought of making smaller DLP TVs?
Templeton: I think you are going to see two things. We're going to make sure we win 40 inches and greater. DLP cleans up when you go above 40 inches because we are basically a semiconductor technology. We can make our chips smaller over time and therefore cheaper. As the display gets bigger, we get more cost-effective, let alone better looking and more reliable.

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