Wed, Sep 07, 2005 - Page 11 News List

Chartered says losses likely to be lower than expected


Chartered Semiconductor Manu-facturing Ltd (特許半導體), Southeast Asia's largest supplier of made-to-order chips, said this quarter's loss, excluding a US$13 million cost, may not be as large as expected.

The Singapore-based company's net loss will be at the "mid to low-end" of its July forecast of US$42 million to US$52 million, or US$0.17 to US$0.21 an American depositary share, according to a statement released yesterday. Sales will be at the higher end of a previous forecast range, helped by contributions from Silicon Manufacturing Partners, it said.

The company has a 49 percent stake in Silicon Manufacturing, its venture with Pennsylvania-based Agere Systems Inc.

Industry leader Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has also forecast increased demand this quarter, as makers of electronic products ramped up orders ahead of the year-end holiday season.

The Semiconductor Industry Association predicted global chip sales will climb 6 percent this year to US$226 billion, boosted by demand for personal computers and mobile phones.

"The semiconductor industry looks OK and we're maintaining our overweight rating for now as demand picks up at the year end," said Celine Chiang (江宜津), a fund manager at Ta Chong Investment Trust Corp (大眾投信).

Chartered said it expects an additional US$13 million in interest expenses this quarter due to a repayment for US$477.8 million of convertible notes and a higher debt level. This will raise the current quarter's loss guidance by US$13 million, the statement said.

Chartered posted a profit of US$16.2 million, or US$0.06 an American depositary share, a year earlier.

"Consistent with higher revenues, our third-quarter net loss, excluding the impact of recently concluded financing arrangements, is expected to be approximately at the mid to low end of the range guided previously," George Thomas, chief financial officer at Chartered, said in the statement.

Including contributions from Silicon Manufacturing, revenue for the third quarter would be in the range of US$302 million to US$312 million, the company said at that time.

"The seasonal uptick in notebook PCs, mobile phone and MP3 players is starting to drive semiconductor demand up, benefiting Chartered," Ivan Goh, an analyst with Dresdner Kleinwort Wasserstein in Tokyo, said before the announcement.

"It underlines the end of inventory correction in the semiconductor industry," he said.

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