SINGAPORE -- Chartered Semiconductor Manufacturing Pte. Ltd. here early today (April 19) reported a stronger-than-expected 11% sequential increase in revenues for the first quarter of 2002. The Singapore silicon foundry projected that growth would gain momentum in the current Q2 period, with sales expected to rise another 25% sequentially.
In response to improving market conditions, Chartered said it has increased its 2002 capital spending plans from $400 million to $500 million. The foundry has also decided to accelerate the start of its planned 300-mm wafer plant, called Fab 7, with initial production now slated to start in the third quarter of 2003. Just several months ago, Chartered indicated that the start up of the fab had been pushed back to the end of 2003 (see Jan. 28 story).
In 2002, Chartered now plans to "pulled in" selected purchases of 300-mm tools in preparation of starting Fab 7, according to the company today.
Chartered's Q1 revenues reached $84.4 million, compared to $76.1 million in Q4 of 2001. Two months ago, the Singapore foundry company had raised its initial forecast to "single-digit" sequential growth in revenues in Q1, but conditions continued to improve in March.
The foundry company's net loss was $128.4 million in the first quarter vs. $127.2 million in Q4 of 2001. The loss of $0.93 per American Depositary Share (ADS) was better than Chartered's guidance in February of $0.98 per ADS share.
"During the last six weeks, we have seen growing indications from our customer base that the semiconductor industry recovery is beginning to accelerate," said Barry Waite, president and CEO of Chartered. "We see improvement in orders across all of the market segments we serve and across a wide range of customers, particularly those in communications."
Waite said foundry capacity for 0.18-micron process technologies played a key factor in the first-quarter improvement, and the company expects to more than double its revenues in the technology to "well over 20%" of total sales in Q2.
Most of the extra $100 million in capital spending this year will be used for fab equipment to produce 0.18- and 0.13-micron ICs in the Chartered Silicon Partners joint-venture Fab 6, said Chia Song Hwee, senior vice president and chief financial officer. In a conference call with financial analysts today, Chia said the 300-mm Fab 7 start scheduled had been pulled in from the end of 2003 to "the end of Q3" next year.
The Singapore foundry is projecting a second-quarter factory utilization rate in the mid-30-percentage range from 28% in Q1 and 25% in Q4 of 2001. The company is estimating a net loss of $113-to-$116 million in the second quarter.
"Chartered is off to a good start in 2002, as wafer shipments in the first quarter were up over 25% from the third-quarter 2001 trough, and recovery momentum is building across the markets we serve," Waite said.
"Assuming that market and customer strength continues as we now anticipate, we have set our sights on a target to achieve a fourth-quarter 2002 revenue run-rate of at least double that of first quarter 2002," he added.
Chartered's wafer-processing capacity in first quarter was essentially flat with fourth quarter 2001 and up approximately 3% from first quarter 2001.
The foundry said its shipments in first quarter totaled 81,600 eight-inch equivalent wafers, an increase of 13.2% from 72,100 wafers in Q4 due to increased demand in the consumer segment and to a lesser extent communications. Shipments in Q1 were 51 below 166,400 wafers in the first quarter last year.
Chartered said average-selling prices (ASPs) for processed wafers decreased 2% to $1,034 in the just-ended quarter from $1,055 per wafer in Q4. Chartered's ASPs dropped 16.7% from $1,242 per wafer.
