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Technology Stocks : Atmel - the trend is about to change -- Ignore unavailable to you. Want to Upgrade?

To: stockbug who wrote (7608)	12/16/1997 2:28:00 PM
From: Frank Chen	Respond to of 13565

Another victim in the business: Actually, I think ATML still hasn't preannounced this close to the end of quarter might have some positive side to it. Probably two more weeks of painful wait for the longs. Frank Cypress Sees Fourth Quarter Profit Shortfall (12/15/97; 2:01 p.m. EST) By Kora McNaughton, TechInvestor Cypress Semiconductor said Friday its fourth quarter results will fall far short of Wall Street forecasts, prompting it to make sweeping changes to its business, including ending production of PC chip sets and commodity EPROMs. In response, Merrill Lynch cut its rating on the stock to outperform from buy, and Cypress [CY] shares fell 7/8 to 7 11/16, a 10 percent decrease. Cypress also said it was shifting its Texas and Minnesota wafer fabs from older process technology to 0.35-micron technology, and closing its San Jose, Calif., test and IC assembly operation. Instead of revenues in the $152 million to $155 million range as predicted by analysts, Cypress said its sales will be $140 million to $143 million due to a $5 million shortfall in its wafer foundry business and the company's inability to ship about $10 million in SRAMs before the quarter ends on Dec. 29. Cypress also said its earnings per share will fall far short of analysts' estimates, with the possibility the company may just barely break even for the quarter. Instead of hitting analysts' earning estimates of 9 cents to 10 cents per share, Cypress said it now expects to report a break-even quarter, or possibly one penny per share. The SRAM shortfall is the result of a timing problem in ramping up production at its Fab 2 in Round Rock, Texas. The company's Fabs 3 and 4 in Bloomington, Minn., which had been producing all of Cypress' SRAMs prior to the current quarter, reached maximum capacity in the third quarter. Cypress said SRAM demand jumped from 21.3 million units in the third quarter of 1996 to 38.5 million in the same quarter of 1997. Cypress said it expects to catch up on SRAM shipments and resume growth during the first quarter of 1998, with revenue projected at $150 million to $155 million. Cypress said its current 1998 revenue projection is still in the range of analysts' estimates, which are between $671 million and $725 million. To refocus its resources, Cypress said it will exit the PC chip set business, which was launched three years ago. The company said it had hoped to add value by merging the SRAM required by PCs with chip set core logic. "Their chip set was technically successful ... but the basic architecture incorporating SRAMs into personal computers has been changed by Intel," limiting the market opportunity, Cypress said. Consequently, Cypress is pulling the plug on its product, disbanding the chip set and closing a motherboard verification center in Munich. The IC architects, memory engineers, system engineers, and designers who created Cypress' hyperCache chip set product have been transferred to the data communications group, the company said. Cypress also is also exiting the commodity EPROM business, which accounted for about $40 million of its annual revenue. Outside SRAMs, Cypress said its three other divisions -- programmable products, data communications, and computer products -- are each forecast to beat their revenue totals of a year ago and the previous quarter, partly offsetting the shortfall in static memories and the foundry business. About 56 percent of Cypress' revenue comes from these three divisions.