TI--analog chip business could grow 20 pct a year

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NEW YORK, May 8 (Reuters) - Texas Instruments Inc (TXN.N) said on Thursday its analog chip business could grow 20 percent annually for the next five years and become 60 percent of total revenue, which it sees growing at a rate of 10 percent a year.

"It's about 40 pct," today, Chief Executive Rich Templeton said during a webcast of the company's annual analyst meeting. "Growing at 20 percent a year over the next five years, you have an analog business that's 60 pct of TI."

The executive said it could take "upwards of three quarters" for the company to get its inventory levels back to normal, after weaker than expected demand for its chips used in high-end phones in the recent quarter.

But he said the company would be careful not to "over-correct" its inventory levels, so that it is prepared when demand starts to improve.

Asked about whether TI would consider exiting the wireless chip business, Templeton said this would be "far-fetched."

Templeton acknowledged that investors were worried about the company's wireless chip business, which slipped to second place behind Qualcomm Inc (QCOM.O) in 2007, but said he sees strong growth in demand for TI chips in advanced phones.

For these phones, TI sells chips supporting applications such as mobile video and web surfing, a segment Templeton said is going to become the most important wireless component.