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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (40729)	12/12/2000 10:50:16 AM
From: Proud_Infidel	Respond to of 70976

Microchip delays fab, cuts budget as distribution sales slow Semiconductor Business News (12/11/00 16:22 p.m. PST) CHANDLER, Ariz. -- Microchip Technologies Inc. today announced a delay in the startup of a new wafer fab facility in Puyallup, Wash., and it has pushed out the timing of capacity expansions in Tempe, Ariz. These moves--and cuts in capital spending--are in response to a slowdown in chip sales, which is partly due to inventory adjustments by customers, said Microchip. Microchip said it now expects to report flat revenues in the current fiscal quarter because of a slowdown in distribution-channel chip shipments. Direct sales to system manufacturers have been on target in the U.S., Europe, Asia, and Japan, but distributors have reported lower-than-expected revenues in November, said the company. "We are disappointed at this recent turn of events at our distribution partners," said Steve Sanghi, president and CEO of Microchip. "Currently, we are projecting that the impact of this distribution inventory correction will last through the March 2001 quarter. Despite this, our new products and customer design win activity remain strong." The Chandler-based company said it is cutting capital spending to $420 million in fiscal 2001 from $510 million under its previous plan. For fiscal 2002, Microchip has lowered its capital spending to just $100 million. The company said it has canceled production equipment orders. The Fab 3 facility was set to start up in August 2001 but now the ramp has been postponed until June 2002. Last May, Microchip acquired the Puyallup site from Matsushita Semiconductor Corp. of America for an undisclosed sum, and it was planning to use the fab to increase production of field-programmable microcontrollers, serial EEPROMs, and microperipheral products (see May 24 story). Microchip is now expected to report net sales nearly equal to $176.3 million in the previous fiscal quarter--plus or minus a few percentage point. The company said its expectation for gross margin percentage for the current quarter remains over 55%.