Chartered's foundry utilization falls to low 60-percent range, loss expected
Semiconductor Business News
(02/27/01 14:37 p.m. PST)
SINGAPORE -- With its fab capacity utilization rates running in the low 60-percent range, Chartered Semiconductor Manufacturing Ltd. today (Feb. 27) warned that it will record a loss in the first quarter and its foundry revenues will be 35% lower than $318.7 million in the fourth quarter of 2000.
The world's third largest pure-play silicon foundry company lowered its estimates for revenues from its prior guidance of 15-20% decline issues late last month.
"While we had previously noted that economic conditions were impacting order rates, in recent weeks we have seen a more severe decline than anticipated," said Chia Song Hwee, senior vice president, chief financial officer of Chartered. "The weakness has now become quite broad, impacting essentially all major end-market segments and geographies as companies continue to work off high inventories while also adjusting to lower end-market demand levels."
The lower revenues and capacity utilization will result in a loss that will range between $0.22 to $0.24 per American Depositary Share, said Chartered, which has been estimating a profit of $0.04 to $0.06 per ADS share.
In January, Chartered announced it was delaying the tooling of its new Fab 7 facility so that it could open the plant as a 300-mm wafer plant. The delay was possible because intense demand for foundry services had eased at the end of December, but since then the business has fallen off even lower. Last month, Chartered also announced a 20% cut in its capital spending plans to $1.2 billion, but it was still planning to invest more than the $911 million expenditures in 2000. Chartered today did not indicate whether it was rethinking its investment plans.
"Even though the outlook for the coming quarters is not clear, we do remain very confident that the underlying drivers of Chartered's long-term growth, namely the global shift to outsourced manufacturing and the increasing pervasion and importance of communications applications, are quite sound," said Barry Waite, president and CEO of the Singapore foundry company.
Chartered said the uncertain near-term environment has made it difficult to forecast foundry demand for the remainder of 2001. However, the unprecedented rate of decline experienced in the first quarter has given Chartered hope for a stronger second half of 2001. Barring a "severe economic contraction," Chartered said it believes revenues in the last half of this year will be higher than the first six months of 2001. |
