SOUTH PORTLAND, Maine -- Fairchild Semiconductor International Inc. today upgraded its outlook for the first quarter to sequentially flat revenues instead of a 3-to-5% drop in its previous guidance because of improving orders for products. In fact, Fairchild canceled a planned temporary shutdown of its wafer fab in South Portland this week due to the growth in bookings, a spokeswoman for the company told SBN recently.
Speaking before an investors conference in Miami today, Fairchild chairman and CEO Kirk Pond said the company was raising its revenue estimate for Q1 because bookings were running stronger than previously expected through the first seven weeks of the current quarter.
"Normally orders in the first quarter don't accelerate until mid-February, but we've actually had fairly good bookings since the third week of January," Pond told attendees at the Credit Suisse First Boston Semiconductor and Semiconductor Capital Equipment Conference in Miami.
"We're particularly encouraged by the continued demand from the personal computing and consumer end markets, in what is usually a seasonally soft period for these segments," he added. "Demand from wireline communications, networking and power supply segments have maintained their slow and steady rebound, while wireless handset demand has remained seasonally weak.
"Overall, our book-to-bill ratio continues to run well above 1:1 and we now believe our revenues for the quarter will be roughly flat from fourth quarter levels," said Pond, who is also president of Fairchild Semiconductor.
The Maine-based chip maker reported revenues of $324.6 million for the fourth quarter of 2001, which were nearly flat with $325.4 million in Q3. Including one-time charges and other items, Fairchild posted a net loss of $16.2 million in the fourth quarter (see Jan. 22 story).
"Demand has been strongest for our power analog and power discrete products, especially our low voltage power MOSFETs in advanced surface mount packages," Pond said. "Historically, as we come out of industry downturns, demand for our newest products has rebounded first and the current cycle seems to be following this pattern. Order rates for our more mature standard logic, discrete and standard linear products continue to lag our newer products.
"We've seen competitive pricing for these mature products become more aggressive this quarter, which we believe indicates there is still excess industry capacity for these older legacy products. As a result of these continued pricing pressures, we now expect gross margins to be sequentially down as much as 100-to-150 basis points overall in the first quarter."
Fairchild is scheduled to release its first quarter results on April 23.
