SINGAPORE -- Chartered Semiconductor Manufacturing Pte. Ltd. here today said its wafer shipments may be slightly lower than expected in the third quarter, causing revenues to drop 15-to-20% from Q2, but the foundry company's loss in the current period will still be in line with previous estimates.
"The quarter is progressing much as we had anticipated, and we remain on track to achieve our gross profit margin and EPS targets of a `loss of approximately $84 million to $86 million' and a `loss per ADS of approximately 94 to 96 cents,' respectively," said Chia Song Hwee, senior vice president and chief financial officer of Chartered.
In July, Chartered posted a net loss of $107.6 million on sales of $100.7 million in the second quarter. The Singapore foundry company's net sales sequentially dropped 62.9% in Q2 from $271.4 million in Q1 of this year, and company officials had predicted that Chartered's factory utilization rate would drop to the mid-20% range from about 31% in the second quarter (see July 20 story).
But today, the world's third largest silicon foundry company revised its fab utilization forecast to the "low-20%" range for Q3.
"With this in mind, we have widened the band on our revenue target to 'down 15-20%' from the prior quarter," Chia said. "The original target was 'down approximately 15%.'
"Even at the low end of this band, we anticipate still being within the range of our gross profit margin guidance as a result of additional success in our cost-reduction actions," he added. "In line with expectations, product mix has improved this quarter, and we are holding our average selling price guidance of `up a few percentage points' from prior quarter."
Chartered president and CEO Barry Waite said there are signs of stabilization in the semiconductor industry after the worst downturn ever for the silicon foundry business. Some industry managers and analysts have predicted a "soft" bottom to the downturn in the third quarter, with no solid rebound in foundry industry revenues until next year.
"We still expect the cycle to bottom some time in the second half of this year; however, the exact timing and the pace of the expected recovery remain difficult to predict," Waite cautioned. "In the meantime, our focus remains on positioning Chartered to rapidly respond when industry growth returns."
Last month, while releasing Q2 financial results, Chartered postponed its 300-mm wafer fab by one year to 2003 and it cut capital spending by 30% to $700 million this year. The Singapore company is scheduled to release third-quarter results on Oct. 23.
