Chartered Semiconductor Manufacturing Ltd, the world’s third-largest maker of customized chips, forecast a record quarterly loss and will cut more jobs to weather the deepening global recession.
The net loss in the first quarter will probably be US$142 million to US$152 million, Singapore-based Chartered said yesterday after reporting its largest deficit since the first quarter of 2002. Sales may slump as much as 40 percent to as low as US$232 million, it said.
Chief financial officer George Thomas said customers are reducing “even more aggressively” as inventory levels pile up amid the broadening slump in demand. The collapse in chip sales led Toshiba Corp, Japan’s largest maker of semiconductors, to predict a record annual loss yesterday.
“We’re in unprecedented times. This is a demand-driven downturn and everything from handsets to PCs to consumer electronics is going to decline by 5 to 10 percent this year,” said Steven Pelayo, a Hong Kong-based analyst at HSBC Holdings PLC. “Combine that with clients and chipmakers having excess inventories and you have these ugly times.”
Chartered fell 2.1 percent to S$0.23 as of 10:24am in Singapore trading. Its US depositary receipts dropped 4.3 percent to US$1.56 before the earnings announcement.
“In this environment, it is difficult to predict with accuracy how the quarter will turn out,” Thomas said.
The fourth-quarter loss of US$114 million, or US$0.46 per ADR, included a reversal on a US$34 million tax credit. The US$81 million median loss estimate in a Bloomberg survey of five analysts didn’t factor in the tax-credit reversal. Sales slipped 0.3 percent to US$351.7 million. Chartered will give a mid-quarter update on March 13.
Chartered said it will cut 8 percent of its workforce to save US$16 million a year. It will book an US$8 million one-time charge in the first quarter. The latest reduction brings the total eliminations to 18 percent of its workers, the chipmaker said.
The company said it plans to slash capital spending this year by 35 percent to US$375 million and temporarily shut down two production lines.
Qualcomm, the world’s largest maker of mobile-phone chips, on Wednesday cut its annual sales outlook and said it won’t give an outlook for profit because of the unpredictability of demand.
A collapse in demand for electronics has forced Intel Corp to say its 87-quarter streak of profitability may end. Samsung Electronics Co, the second-largest chipmaker after Intel, this month reported its first quarterly loss.
Taiwan Semiconductor Manufacturing Co, the top producer in the so-called foundry industry that Chartered competes in, last week forecast its first quarterly loss since 1990.
“Demand’s not coming back,” said Stuart O’Gorman, who helps manage US$800 million in technology shares at Henderson Global Investors Ltd in Edinburgh. “Most of the chipmakers are going to go out of business and it’s a very long road.”
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks