March 1, 2001–Milpitas, California–Chartered Semiconductor Manufacturing recently announced that due to the weakening economic environment and market conditions, revenues and earnings for the company’s first quarter will be below its earlier guidance.
“While we had previously noted that economic conditions were impacting order rates, in recent weeks we have seen a more severe decline than anticipated. The weakness has now become quite broad, impacting essentially all major end-market segments and geographies as companies continue to work off high inventories while also adjusting to lower end-market demand levels. Accordingly, we are updating the first quarter guidance which we provided in our Year 2000 earnings release in late January,” said Chia Song Hwee, senior vice president, CFO & CAO of Chartered.
For the first quarter, the company now anticipates that revenues will be down from the fourth quarter of 2000 approximately 35%, compared to prior guidance of a 15 to 20% decline. With the resultant average factory use in the low 60s, it is now anticipated that for the quarter, the company will record a loss in the range of US$0.22 to US$0.24 per American Depositary Share (ADS). This compares to prior guidance which was a profit of US$0.04 to US$0.06 per ADS.
The uncertain near-term environment makes it particularly difficult to forecast the demand profile for the remainder of 2001. However, barring a severe economic contraction, the company continues to believe that revenues in the second half of 2001 will be up from the first half, particularly in light of the unprecedented rate of decline in the current quarter.
“Even though the outlook for the coming quarters is not clear, we do remain very confident that the underlying drivers of Chartered’s long-term growth, namely the global shift to outsourced manufacturing and the increasing pervasion and importance of communications applications, are quite sound. Chartered is committed to executing on its core strategy as it manages through this difficult period with a continued focus on the strong long-term market opportunity,” concluded Barry Waite, president & CEO of Chartered.