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Singapore’s Chartered beats analysts’ estimates

Chartered Semiconductor Manufacturing Ltd (特�?the maker of chips that power Microsoft Corp’s Xbox 360 console, reported profit and forecast earnings that beat analysts’ estimates.

First-quarter net income dropped 62 percent to US$2.4 million, from US$6.3 million a year earlier, the Singapore-based company said yesterday in a statement. Chartered was expected to post a loss of US$1.2 million, a median of five analysts’ estimates compiled by Bloomberg showed.

Broadcom Corp, Chartered’s largest customer, helped the Singapore chipmaker stay profitable after winning more orders from companies that make equipment for fixed-line phone networks. Chartered joined Irvine, California-based Broadcom in predicting sales that beat analysts’ estimates.

“Chartered’s activity level should pick up in the second half as it wins orders from customers” including Microsoft, Qualcomm Inc and Infineon Technologies AG, said Patrick Yau, a Singapore-based analyst at Macquarie Group Ltd.

Yau rated Chartered shares “neutral.”

Sales climbed 20 percent to US$388.2 million, compared with a median of US$367 million estimated by the five analysts.

The chipmaker forecast second-quarter profit will probably be US$1 million to US$11 million, compared with a US$24.7 million loss a year earlier. Sales may rise as much as 40 percent to a record US$461 million, from US$329.9 million a year earlier, helped by output from a new factory.

Chartered last month paid US$233 million to Hitachi Ltd for a factory in Singapore that makes semiconductors for Renesas Technology Corp, the world’s largest privately held chipmaker.

“We’re selectively looking to add capacity and if it means buying a fab in Asia, we’ll do so,” chief executive officer Chia Song Hwee (謝松輝) said in an interview yesterday.

While the chipmaker is “encouraged by positive signs,” pricing pressure is “still challenging, very competitive and intense,” Chia said on a conference call with analysts.

Chartered expects to make chips for two new customers in the communications industry in the current quarter, he said.

Sales of chips for communications products, including telephone base stations, climbed to 48 percent of total revenue from 34 percent a year earlier, the company said. Semiconductors used in computers fell to 16 percent of sales from 43 percent.

About 86 percent of the company’s factory capacity was in use in the first quarter and utilization will probably be between 85 percent and 91 percent for the current period, the statement said.

Chartered is the first among the world’s four largest customized chipmakers to announce results for the quarter. Industry leader Taiwan Semiconductor Manufacturing Corp (台積電), United Microelectronics Corp (聯電) and Semiconductor Manufacturing International Corp (中芯) are scheduled to report earnings next week.
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