Scumbria - Intel may "warn" this quarter - but your WinCHIP company just beat Intel to the punch - WITH A LOSS!
How about them WinChips, eh? Starting to sound like LoseChips!
Paul
{===========================}
Tuesday June 2, 8:45 pm Eastern Time
Company Press Release
IDT Updates Financial Outlook
First Quarter Operating Loss Expected
SANTA CLARA, Calif.--(BUSINESS WIRE)--June 2, 1998--IDT (NASDAQ:IDTI - news) announced that looking forward, results for the first and second quarters of fiscal 1999 are expected to fall below prior results.
Revenue for the first quarter (June) is expected to decline approximately 10 percent compared with the same period in fiscal 1998. This revenue shortfall would result in a first-quarter pre-tax loss from operations of approximately $15 million.
In addition, first quarter results are expected to include a non-recurring charge relating primarily to excess SRAM manufacturing capacity, certain technology matters, as well as other miscellaneous items. Based upon current information, the Company estimates the amount of the pre-tax charge will approximate $25-45 million, greater than half of which is expected to be non-cash.
The Company believes that some improvement in operating financial performance may occur in the second quarter. However, because of current limited order visibility, and the seasonal weakness which typically characterizes the September quarter, the outlook for the second quarter remains uncertain.
''We are disappointed to have an operating loss after five consecutive profitable quarters,'' said Len Perham, president and chief executive officer for IDT. ''But unit demand and pricing in the SRAM market
remain difficult, and we don't see that changing in the near term.''
The Company expects SRAM to comprise 20-25 percent of total revenue during the first fiscal quarter, the lowest percentage on record. The Company's sales of commodity SRAM into the PC secondary cache
market has continued to decline and will be negligible, down from $50-60 million quarterly at the high point during fiscal 1996.
The Company is refocusing its efforts in SRAM, with the objective that SRAM be a smaller but more profitable portion of its business.
''Our commitment to SRAM design and process technology won't change,'' stated Perham, ''but we will concentrate on products that incorporate unique features and/or proprietary architectures, such as our
recently announced ZBT(tm) (Zero Bus Turnaround(tm)) memory family, which bring the opportunity for real system performance improvements to our datacom and telecom customers.''
Sales of the Company's WinChip(tm) x86 microprocessors have not ramped sufficiently to offset the decline in SRAM revenue. Contributing factors include:
-- An industry-wide slowdown, exceeding normal seasonal weakness, in
unit demand for x86 processors
-- A faster-than-expected shift in demand within the sub-$1000
desktop PC market, from 200 MHz to 233 or 266 MHz processor
speeds
-- A substantial drop in demand experienced by the Company's limited
base of OEM customers
''We remain convinced that the IDT WinChip family of microprocessors is the right product for the
mainstream x86 computing market,'' stated Perham. ''The WinChip processors are the only processors
available today which have been designed from the ground up to target the sub-$1000 PC. The WinChip
family is among the most compatible with all Windows(R) software, and offers the most compelling
combination of performance, value and inherent low power consumption.''
''We've had great success bringing out the original WinChip design in a short amount of time, building it in
our R&D fab, and transferring it to production -- with good yields -- in our Oregon facility,'' Perham
continued. ''Now we are completely focused on a product transition from the original WinChip processor to
the recently announced WinChip 2(tm) processor, so that we can ratchet up processor speeds to 240, 266,
and 300 MHz.''
The Company has accelerated its original timetable for in-house production of WinChip 2 microprocessors,
in both 0.35- and 0.25-micron technology. Samples of WinChip 2 processors are expected to go to
customers during the first fiscal quarter, with commercial shipments beginning during the second fiscal
quarter.
During the first fiscal quarter, the Company's communications products, high-performance logic and RISC
microprocessor divisions appear generally on track to achieve their business objectives.
About IDT
IDT enables a digitally connected world by providing innovative semiconductor solutions to leading-edge
designers in communications and computing. IDT's broad product mix consists of communications
memories, networking devices, both RISC and x86 microprocessors, high-speed SRAMs and
high-performance logic. The company's innovative technologies and products take aim at markets expected
to exceed a total of $20 billion in 1998.
Headquartered in Santa Clara, Calif., the company employs approximately 5,000 people worldwide and
has manufacturing facilities in California, Oregon, the Philippines and Malaysia. IDT stock is traded on the
NASDAQ stock market under the symbol ''IDTI.''
Additional information about IDT is easily accessible through the World Wide Web (http://www.idt.com),
CD-ROM by calling 800/345-7015, or via fax-on-demand at 800/9-IDT-FAX. The investor hotline is
408/654-6420.
Certain statements made in this press release with respect to the Company's expected financial results, the
SRAM and microprocessor marketplace and trends, the Company's products, product development and
production are forward-looking statements and involve risk and uncertainties. These risks and uncertainties
include ''Fluctuations in Operating Results,'' Cyclicality of the Semiconductor Industry,'' ''Risks Associated
with Expansion of Product Families -- x86 Microprocessors,'' ''Risks Associated with Manufacturing
Risks,'' ''Dependence on New Products,'' and other risks and uncertainties discussed in the section
entitled ''Factors Affecting Future Results'' in the Company's quarterly report on Form 10Q for the fiscal
quarter ended December 28, 1997. The Company's actual future results could differ materially from such
forward-looking statements.
Note to Editors: WinChip and WinChip 2 are trademarks of Integrated Device Technology. Zero Bus
Turnaround and ZBT are trademarks of Integrated Device Technology, Inc. and the architecture is supported
by Micron Technology, Inc. and Motorola, Inc. All other brand names and product names are trademarks,
registered trademarks, or trade names of their respective holders.
Contact:
IDT Investor Relations
Michael Tierney, 408/654-6676
mtierney@idt.com
Investor Relations Hotline, 408/654-6420
More Quotes and News:
Integrated Device Technology Inc (Nasdaq:IDTI - news)
Related News Categories: computers, semiconductors
Help |
