Shares of Texas Instruments (Nasdaq: TXN), the No. 1 maker of communications chips, fell 1 percent in Monday trading, ahead of the first-quarter results announcement scheduled after the close.

TI was at $32.12, down 35 cents, in early trading. They've gained more than 10 percent this year but fallen 9.6 in the past year, during which the Dallas-based semiconductor pioneer completed its biggest acquisition, the $6.5 billion takeover of National Semiconductor.

The enlarged TI, already a leader in analog chips for communications, got even stronger, with National's customer base in Detroit, among communications equipment makers and defense contractors.

Analysts expect TI to report earnings to drop about 50 percent to $324.6 million, or 28.6 cents a share, from $666 million, or 55 cents a year ago. Revenue is expected to fall about 10 percent to $3.06 billion from a year earlier.

True to tradition, TI warned on March 8 that the quarter was more difficult than expected and predicted revenue would range only between $2.99 billion and $3.11 billion, with net income ranging between 15 cents and 19 cents a share.

The Texas chipmaker's usual mid-quarter update is usually regarded as a bellwether. But the problem for TI may be customer-specific, because last week, Qualcomm (Nasdaq: QCOM), the biggest designer of mobile chips, reported second-quarter net income more than doubled to $2.23 billion, or $1.28 a share, as revenue rose 28 percent to $4.94 billion.

Qualcomm, based in San Diego, said it's facing problems in the current quarter because its Asian chip foundries are running at full capacity and may not have room to make its chips. TI, by contrast, manufactures most of its own chips.

Still, analysts generally believe TI's performance will improve because of overall growth in the sector. At Wedbush Securities, analyst Betsy Van Hees rates the chipmaker Outperform with a $38 price target. Later this year, the company should outgrow the overall industry largely due to market share gains.

At Jefferies, analyst Mark Lipacis, who rates TI a buy with a target of $40, especially because of demand for its OMAP5 multicore chip that's being designed into many new smartphones and tablets for shipment later in 2012.

TI's chips end up in the mobile phones from most of the biggest suppliers, such as Ericsson (NYSE: ERIX), Motorola Mobility (NYSE: MMI) and LG Group. They also are designed into cars of all the Big Three automakers, which have reported strong sales.

Also to note will the No. 4 global chipmaker's cash position. As of Dec. 31, TI had cash and investments of $3.2 billion.