Chartered beats forecasts

Chartered Semiconductor Manufacturing Ltd, Singapore's biggest chip company, said its fourth-quarter loss will be narrower than forecast thanks to more orders for chips that work in devices such as cell phones and modems.

The loss will be about US$44 million, or US$0.18 per American depositary share, Chartered Semiconductor said in a statement. In October, the company forecast a loss of about US$50 million, or US$0.20. Chartered Semiconductor lost about US$109 million, or US$0.45, in the fourth quarter of last year.

Chartered Semiconductor, which is headed for its 12th straight unprofitable quarter, is trimming its losses as demand revives after a slump of almost three years.

It's getting orders from new customers such as MediaTek Inc (聯發科技) and from chipmakers being turned away from factories owned by Chartered's Taiwanese rivals, which are at near full capacity, said analysts such as Pranab Kumar Sarmah, of Daiwa Institute of Research.

"I was really happy to see the numbers," said Joseph Spiegel, who helps manage US$300 million at Spinner Asset Management in New York, including Chartered Semiconductor shares. "It's a nice increase from their prior guidance."

Chartered Semiconductor is the world's fourth-largest provider of made-to-order chips, supplying companies such as Motorola Inc and Broadcom Corp. It trails industry leader Taiwan Semiconductor Manufacturing Co (台積電), United Microelectronics Corp (聯電) and International Business Machines Corp.

Chartered Semiconductor said it will probably use about 69 percent of its manufacturing capacity, compared with a previous forecast of 66 percent.

The forecast loss of US$44 million is the midpoint in a range of US$40 million to US$48 million, Chartered said. Its previous range was for a loss between US$45 million and US$55 million.

"The increase compared with our October outlook is primarily due to higher demand from customers in the communications sector," said chief financial officer George Thomas, in the statement.

Communications accounted for 49 percent of sales in the third quarter. Revenue for the fourth quarter is now forecast to rise 65 percent to US$178 million, compared with a previous forecast of 58 percent growth. Sales were about US$108 million in the year-earlier period.

"The order momentum is relatively OK," Sarmah, who rates the shares "hold," said in an interview before the announcement. "Chartered is slowly getting better."