Chipmaker Intel Corp on Thursday lowered revenue estimates for the first quarter by about 25 percent and said it would cut its work force by 6 percent -- or 5,000 jobs -- mainly through attrition.
In Taiwan, meanwhile, the announcement contributed to local investors' worries yesterday, with the TAIEX dropping 0.54 percent and the overall technology subindex falling 1.1 percent.
Intel blamed the bad news on the current economic slowdown, saying it continues to affect demand for PCs and has spread to other sectors, including networking, communications and servers.
"The processor business was already pretty much in the tank," said SG Cowen Securities analyst Drew Peck.
Intel earned US$3.1 billion, excluding charges, on revenue of US$8.02 billion, in the first quarter ended April 1 last year. The company is anticipating revenue of US$6.52 billion for first quarter of this year, down from US$8.7 billion in the previous quarter.
"At this point, the industry appears to be staring into the abyss," said Dan Scovel, a semiconductor analyst at Needham & Co. "There is a hope for recovery before the end of the year. Anything beyond that is a guess."
News of Intel's woes and declines in February sales at many Taiwanese technology companies weighed on local semiconductor stocks yesterday.
Taiwan Semiconductor Manu-facturing Co (
Among those stocks actively traded, chipmaker Winbond Electronics Corp (華邦電子) fell NT$1.40, or 3.6 percent, to NT$38.
Mosel Vitelic Inc (
Yesterday, Mosel announced that sales tumbled 37 percent in February to NT$1.21 billion from NT$1.91 billion a year before.
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