Chartered Semiconductor Manu-facturing Ltd, the No. 3 maker of custom-made chips, yesterday said it had its first back-to-back quarterly loss since going public in 1999 and expects the loss to widen in the next three months.
Chartered had a second-quarter loss of US$107.6 million, or US$0.78 for each American depositary receipt, compared with a profit of US$57.9 million a year earlier. Sales fell 63 percent to US$100.6 million from US$271.4 million with shrinking demand for chips, and delaying a new plant by a year to 2003.
"Inventory levels are still high and orders have virtually stopped," said Tan Choon Hoe, a fund manager at AIB Govett (Asia) Ltd., who helps manage US$1 billion in Asian investments at AIB Govett (Asia) Ltd. in Singapore. "In the third quarter, we're unlikely to see any recovery for Chartered."
With a weaker outlook for the third quarter as customers such as Ericsson AB and Conexant Systems Inc may cut orders amid their own losses this year, Chartered said it will slash investments by 30 percent for 2001. That may hurt efforts to narrow the gap with rivals Taiwan Semiconductor Manufacturing Co and United Microelectronics Corp, analysts say.
Chartered expects revenue to decline 15 percent from the second quarter, and forecast a loss of US$0.94 to US$0.96 an ADR. The second-quarter results were in line with a loss of US$108.3 million which was the average estimate of five analysts surveyed by Bloomberg News. Each ADR represents 10 Chartered shares.
"Chartered now expects the third quarter to further deteriorate as visibility remains extremely limited and demand is still very weak," said Dan Heyler, an analyst at Merrill Lynch & Co in Taipei. "That represents a change relative to a previous guidance of stabilization in the third quarter."
Chartered's shares in Singapore fell as much as S$0.08 cents, or 1.9 percent, to S$4.14.
Singapore-based Chartered's results were hurt by declining orders from communications customers such as Ericsson and Motorola. Other mobile phone manufacturers and makers of other communications equipment made up about half of sales.
"We saw weakness in every segment and, compared with the first quarter, the largest revenue decline was in the communications segment," Barry Waite, Chartered's chief executive, said on an analysts' conference call. "In the last three quarters, the semiconductor industry has experienced one of its sharpest decelerations and 2001 is now expected to be its worst year of contraction."
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