IS this the proverbial light at the end of the tunnel?
Chartered reiterates Q4 guidance, bumps up fab utilization estimate to mid-20%
Loss of $79-81 million expected with revenue being flat-to-down 5% from Q3
Semiconductor Business News
(12/11/01 19:02 p.m. EST)
SINGAPORE -- Silicon foundry supplier Chartered Semiconductor Manufacturing Pte. Ltd. today reaffirmed its revenue and earnings estimates for the fourth quarter, stating that sales will be "flat-to-down 5%" from the third quarter.
The world's third largest pure-play chip foundry is forecasting a loss of $0.95-to-$0.97 per American depositary shares, said Chia Song Hwee, senior vice president and chief financial officer of Chartered.
"In addition, we expect shipments and the resultant utilization to be somewhat better than previously projected," said the CFO. Chartered is now predicting fab utilization rates in the mid-20 percent range vs. its previous guidance of low-to-mid-20's, he said. In the third quarter, Chartered's foundry utilization was at 22%.
"We are also making good progress this quarter in enriching the technology mix of our shipments," Chia said. "We expect the percentage of revenues attributable to 0.18-micron product to more than double this quarter, compared to the third-quarter level of 4%."
In October, Chartered reported a net loss of $118.3 million on revenues of $79.2 million in the third quarter. The company's loss per American depositary share was $0.86. At the time, Chartered officials said the foundry company needed to improve its fab utilization rates from 22% in Q3 to about 70% to breakeven (see Oct. 23 story).
Average selling prices for processed wafers are expected to decline 5-to-10% in the fourth quarter from Q3 primarily because of product mix and variations in customer demand, said the chief financial officer. "This compares to our original guidance of down 5%," he said. "We still anticipate being within the range of our original third-quarter gross profit margin guidance which was 'a loss of approximately $79 million to $81 million,' as operational improvements are expected to offset the impact of additional price decline."
The Singapore foundry is "encouraged by the early signs of stability that we are beginning to see in our business and in the industry," said Barry Waite, president and CEO at Chartered. "We believe that the coming upturn will further strengthen the outsourcing trend and reinforce the validity of the fabless business model."
Chartered's major rivals--Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) and United Microelectronics Corp. (UMC) in Taiwan--are also reporting steady sequential growth in foundry revenues in the final months of 2001 (see Dec. 7 story).
In November, TSMC hiked its estimate for a pre-tax income in 2001 by more than 20% from a previous prediction in September (see Nov. 26 story). Sources indicate that TSMC's fab utilization has increased from 41% in Q3 to about 47% in the current quarter, while UMC has improved from 37% to an estimate of 40% in Q4. |
