Note the bold near the bottom, Stan.
Chartered Semiconductor May Cut Jobs, Budget as Demand Stalls
By Greg Chang
10/23 12:01
quote.bloomberg.com
Singapore, Oct. 24 (Bloomberg) -- Chartered Semiconductor Manufacturing Ltd., the worst-performing stock in the Straits Times Index this year, may say its loss in the third quarter narrowed from a year earlier. The chipmaker may trim its budget for equipment and cut jobs as a recovery in demand stalls.
Singapore-based Chartered Semiconductor, which provides custom-made chips, probably had a loss of $88.7 million in the three months ended Sept. 30 compared with a loss of $118.3 million in the year-earlier period, according to a Bloomberg News poll of five analysts. The company reports earnings Friday.
Chartered Semiconductor, whose shares have fallen 78 percent this year, is set to report its seventh consecutive quarterly loss. The company earlier this month raised money from investors for the fourth time in three years. It may now cut costs by firing workers or reducing spending on new factories, analysts said.
``Demand remains very weak and we are not looking at a very strong 2003,'' said Warren Lau, an analyst with HSBC Securities, who rates the shares ``reduce.'' ``They probably have no choice but to cut headcount.''
Lau predicted the company may cut 15 percent to 20 percent of its workforce. As of Dec. 31, Chartered Semiconductor had 3,982 employees.
Cutting Budgets
Chartered Semiconductor may also trim its capital expenditure budget of $500 million for this year, analysts said.
The company on Sept. 2 forecast that it would use 40 percent of its chip-making equipment during the quarter. It needs to use 70 percent to break even.
Taiwan Semiconductor Manufacturing Co., Chartered's larger rival, this week said it will spend $1.65 billion on factories and machinery in 2002. Earlier this year, it had forecast spending of $2.5 billion. Intel Corp., the world's biggest chipmaker, lowered its budget to $4.7 billion from as much as $5.2 billion.
`As management, you'd be looking at all alternatives to see how to bring costs down,'' said Jatin Doktor, an analyst with G.K. Goh Research, who rates the shares ``trading buy.'' |
