Chartered Semiconductor Man-ufacturing Ltd may paint a brighter outlook on business when it provides an update for the fourth-quarter next week, although its forecast of a loss isn't expected to change, investors said.
The third-largest maker of chips to other companies' designs is expected to stick to an October estimate of a loss of US$95 to US$97 on each American depositary receipt for the three months ending Dec. 31, investors say. Chartered will provide the update tomorrow through a news release.
Chartered's outlook is crucial to many investors who want an idea of how sales are doing, and how much of production equipment is in use.
Prospects of more orders helped Chartered shares gain more than 40 percent in two months, making them the fourth-best performer on Singapore's benchmark Straits Times Index.
"Investors are predicting Chartered will have some good news for them but we can't be too aggressive after the magnitude of the gain," said Ian Lui, the chief investment officer of Allianz Asset Management Co in Singapore, who manages S$1 billion in stocks, including Chartered shares. "The outlook may be more optimistic, but to what extent, no one knows."
Still, some investors are betting that the slump in the semiconductor business this year, which manufacturers say is the worst in the industry's history, may have ended.
Semiconductor Sales Worldwide chip sales are expected to fall 31 percent this year to US$141 million. In 2002, revenue may expand 6.3 percent, followed by a 21 percent surge in each of the next two years, the Semiconductor Industry Association said this week.
"The likelihood of more customers coming back with orders is increasing as we work through the inventory overhang," said Daniel Heyler, who heads the Asian semiconductor research team at Merrill Lynch & Co in Hong Kong. Heyler has an "intermediate accumulate" and "long-term buy" recommendation on Chartered shares.
Chartered has shown signs of an improving market.
Still, Michael Buehler-Garcia, Chartered's vice president of business development, said then the company's fourth-quarter forecast hasn't changed.
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