SST expects a bonanza from Y2K purchases
A service of Semiconductor Business News, CMP Media Inc.
Story posted 11:30 a.m. EST/8:30 a.m., PST, 8/24/99
By Bolaji Ojo<.i>
NEW YORK (ChipWire/EBN) -- Silicon Storage Technology Inc., a maker of flash memory products, said Monday that there are signs that some of its customers will increase their orders in the fourth quarter in preparation for potential Year 2000 problems.
The increased business will result in SST posting a major increase in fourth-quarter revenue, according to Jeffrey Garon, vice president and chief financial officer of the Suunyvale, Calif., chip maker.
Increased demand for the company's products, which is already at a record high because of the ongoing shortage of flash memory, will help boost fiscal 1999 revenue substantially while resulting in flat sequential growth in the first quarter of 2000, Garon said.
"Many customers, particularly in the PC business, are talking of buying a boatload of flash memory in the fourth quarter and taking delivery in the first quarter of 2000 because of Y2K concerns," said Garon at the New York Society of Security Analysts' annual Semiconductor and Semiconductor Equipment Manufacturers Conference.
SST said it expects to break even in the current quarter and record a profit of about 20 cents per share in the fourth quarter. Fiscal 2000 revenue will be between 70 cents and $1.60 per share, depending on how the flash market develops in the next year, according to Garon.
The company said about half of its revenue in the current quarter will be from new products introduced in the last year. That portion is expected to grow to about 75% by the end of the year.
SST also announced it is preparing to raise about $100 million in a secondary offering in the second half of 2000. A major portion of that money will be used to ramp production, while the remainder will be set aside to meet future expansion needs.
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