Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Lam Research (LRCX, NASDAQ): To the Insiders -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (4745)	1/23/2002 11:51:49 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 5867

Motorola cuts chip capital spending to just $200 million in 2002 Company aims to make chip business profitable by Q4 this year Semiconductor Business News (01/23/02 10:38 a.m. EST) SCHAUMBURG, Ill. -- As part of its new "asset light" chip strategy, Motorola Inc. will cut semiconductor capital spending by 67% to just $200 million in 2002 compared to $610 million last year, which was substantially below $2.4 billion in 2000, said the president of the company's semiconductor business today. During a conference call with financial analysts, Fred Shlapak said Motorola's Semiconductor Products Sector expects to further reduce expenses and reach a "moderate operating profit" in the fourth quarter of 2002. To get there, the company has said it is phasing out four chip manufacturing facilities (see Jan. 10 story), and it will have cut its worldwide semiconductor workforce to 24,000 jobs by the end of 2002--a decrease of 10,000 workers from the start of 2001, Shlapak told analysts this morning. While releasing its fourth-quarter results on Tuesday, Motorola reported that its Semiconductor Products Sector posted an operating loss of $335 million in the fourth quarter on a 4% sequential increase in revenues to $1.12 billion in Q4 (see Jan. 22 story). In the third quarter of 2001, Motorola's semiconductor business had revenues of $1.08 billion and an operating loss of $355 million. Company wide, Motorola expects total revenues for all business sectors to drop 16-to-18% sequentially in the first quarter to a range of $6-to-$6.1 billion from $7.3 billion in Q4, said Edward Breen, president and chief operating officer of the Schaumburg corporation. He also announced plans to cut an additional $200 million of expenses from Motorola's operations in 2002 to help it return to profitability in the second half of this year. Motorola's new guidance for first-quarter earnings shows a loss of $0.11-to-$0.14 per share, excluding special items and charges in Q1, compared to a loss of $0.04 per share, or $90 million, in Q4 of 2001. Overall, Motorola continues to forecast a 5-to-10% drop in total revenues during 2002 from $29.5 billion in 2001. Breen predicted that Motorola would return to profitability in the third quarter if economic conditions continued to improve and savings are achieved in cost cuts, including those planned in Motorola's semiconductors business. Shlapak said Motorola is now forecasting a 5-to-10% growth in semiconductor industry revenues during 2002, following a drop of more than 30% worldwide in 2001. "We expect the [chip] industry to show sequential improvement each quarter, with stronger acceleration in the second half," said the president of Motorola's Austin-Tex.-based semiconductor group. "This should lead to considerable higher industry sales in 2003." He told analysts that the company's new initiative to grow semiconductor revenues from licensing of intellectual property had increased royalties by 25% last year after those efforts were launched in the second half of 2001. Shlapak did not release specific royalty revenue figures. "Our goal is a further 50% increase [in semiconductor royalties] this year," he said. "We believe we can make this a substantial stable factor in our business going forward. Included in this initiative are patent cross licenses, process technology cross licenses and agreements with partners to commercialize manufacturing inventions and know-how that we have created in the course of conducting business," Shlapak explained. Motorola's semiconductor business will earmark its $200 million in capital spending for production of specialty technologies--such as silicon-germanium carbon (SiGe:C) processes and radio-frequency (RF) BiCMOS, according to Shlapak. The company will increase its efforts to utilize more capacity at outside silicon foundries as well as partnerships for new manufacturing volumes and process development, he said. But, Shlapak emphasized that "asset light does not mean R&D light." "We will maintain a substantial investment in new platform products and process development, driving innovation and competitive advantages," he promised analysts. As an example, Shlapak said Motorola plans to complete the qualification of a new 0.1-micron (100-nm) CMOS technology in its wafer fabs in December 2002. The technology was disclosed at last month's International Electron Device Meeting (IEDM), and it features Motorola's fourth-generation copper interconnect processes, he said.