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

To: FJB who wrote (47068)	5/21/2001 6:24:29 PM
From: Cary Salsberg	Respond to of 70976

RE: "...revenues will increase sequentially in both the third quarter and the fourth quarter..." This is very bullish. Chip revenues have hit bottom and will turn up. I see AMAT at $115 by year end.<G> Just practicing for a possible new career as an investment advisor or market analyst.

To: FJB who wrote (47068)	5/21/2001 7:18:27 PM
From: orkrious	Read Replies (1) \| Respond to of 70976

Average factory utilization is expected to be in the low 30s This is so low it's hard to fathom. The way the semi equips are acting, happy days are here again. Every day is a holiday and every meal is a feast. <VBG> Jay

To: FJB who wrote (47068)	5/22/2001 1:41:07 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Chartered won't cut spending or delay 300-mm despite low fab utilization rates Semiconductor Business News (05/22/01 09:26 a.m. EST) SINGAPORE -- Chartered Semiconductor Manufacturing Pte. Ltd. here is still planning $1 billion in capital spending this year, and it's not likely to delay the start of 300-mm wafer processing in 2002 despite a sharp drop in foundry revenues in the second quarter, said company executives today during a conference call with analysts. Chartered--the world's third largest pure-play silicon foundry supplier--has slashed its forecast for second-quarter revenues to a sequential drop of 48% from $206.7 million in the Q1 period. Chartered also warned that its fab utilization rate will fall to about one-third its foundry capacity because of weaker-than-expected demand and cancellation of orders (see May 21 story). "At this point we do still believe that the second quarter will be the low point of this cycle for us," said Barry Waite, president and CEO of Chartered. "We say this largely because of the swiftness and severity of the falloff in the first half for all of us in this industry. "This [continued sharp drop] indicates that revenues need to come up just to meet the actual consumption levels, even if there is only the modest growth in the end markets," added the chief executive during today's conference call with analysts. Chartered's Q2 revenues are now expected to be 60% below sales in the same period last year--which was the peak of the boom cycle, according to most executives and analysts. While revenues are dropping sharper than expected in Q2, Chartered said it is anticipating sequential growth in foundry sales during the third and fourth quarters of this year. During today's conference call, executives declined to issue new guidance for the second half of 2001, but they said a new forecast will be released when Q2 results are posted on July 20. In the meanwhile, Chartered is bracing for steeper losses in the troubled second quarter. The company now expects a loss of $0.76-to-0.78 per American Depositary Share vs. a prior estimate of a loss in the $0.50-to-0.52 range. The company's new guidance for Q2 revenues is 25% lower than its forecast one month ago. "The recovery line got pushed out," said Waite, responding to questions about why Chartered's outlook was cut sharply again. Networking ICs and "wire line" devices continue to suffer the most in the current downturn, with PC-related products holding up better in the foundry market, said Chartered managers. When foundry orders started to fall in the first quarter of this year, Chartered turned to "fab fillers"--mostly memory devices for existing customers--to keep its factory utilization rate just above 60% in the period ended March 31. But even the fab fillers are now "running out of gas," lamented Waite. Chartered is unwilling to pursue more memory business just to keep its fabs filled because it would divert engineering resources from the main target of preparing new 0.13-micron processes for 300-mm wafers and new system-on-chip designs, Waite said. Less than 10% of Chartered's foundry capacity has been used for memory, and the CEO said that percentage has "not gone up that much" in Q2. In addition, Chartered has restricted its "fab-filling" strategy in the downturn to existing foundry customers, said Chia Song Hwee, senior vice president and chief financial officer. The addition of memory products in the first quarter was "for so-called opportunistic business" and the Singapore foundry isn't trying to court new customers in this segment," he added during the question/answer session of today's conference call. Waite said overall foundry orders from major chip house--also known as integrated device manufacturers (IDMs)--were down at about the save rate as bookings from fabless semiconductor companies. However, he said IDMs that have not completely adopted a foundry strategy have sharply pulled their products to internal fabs, and they have terminated foundry agreements. But despite the falloff of business, Chartered is not now planning to cut capital spending for a second time this year. The company's budget remains at $1 billion, which was set earlier this year after the foundry trimmed back its original plan of $1.2 billion in capital spending. Chartered is still planning a 9% increase from last year's $911 million in fab investments. And, Waite indicated that 300-mm development continues to be a top priority. Earlier this year, Chartered delayed the opening of its new Fab 7, but upgraded its planned capacity to 300-mm wafers. Fab 7 is still scheduled to begin operations in 2002, he told analysts. "I think we will consider all options and aspects of our business," said Waite, when asked what would happen if business continued to fall in the third quarter. "I'm sure there are some scenarios where we would consider delaying our cap ex for Fab 7, but I don't think that we would delay the development of 300-mm technology capability." --J. Robert Lineback reporting from U.S.