Sunny mid-quarter reports brighten industry outlook

Still watching the clock (or calendar) in anticipation of the industry’s rumored-to-be-approaching recovery? Financials for 2Q03 were mixed, with most companies still clinging to the popular catchphrase “cautious optimism.” Halfway through the third quarter, however, many big-name chipmaking firms are upping their estimates, and for the most part, Wall Street is cheering (although it was disappointed with TI’s news). Here’s a rundown of recent mid-quarter revelations:

AMD CFO Robert Rivet says business in July and August shows signs of improvement, but that the company’s September sales would be the key to 3Q performance. Rivet’s comments were made at a Smith Barney Technology conference in New York City. He called sales in the first two months of the quarter “encouraging,” and put the company in a position to take “significant market share” in 2004 over its current 20% share.

More than 60% of new orders at Applied Materials are for the company’s 300mm equipment, CEO Mike Splinter told attendees at a recent conference. Even if sales stay flat, the company will be profitable, he said at the SG Cowan Fall Technology Conference in Boston.

Singapore’s Chartered Semiconductor has raised its 3Q revenue forecasts and lowered its projections for a net loss, due to moderately-higher demand from computer manufacturers. Revenues are now expected to be between $134 million and $138 million, a 5%-8% sequential gain from 2Q03; the company had previously predicted a 3%-7% increase. Although Chartered is on pace to record its eleventh consecutive quarterly loss, it says the numbers are improving: an estimated 3Q03 net loss of $75 million to $83 million is better than earlier predictions of $78 million to $88 million.

Late last month Intel raised its estimates for 3Q03 revenues from between $6.9 billion and $7.5 billion, to between $7.3 billion and $7.8 billion, saying its Intel Architecture business group generally is trending higher despite “soft” demand for communications products. Intel also expects gross margins to slightly exceed previous estimates, up from 54% to 56%. Intel execs were hesitant, however, to color the news as any kind of market recovery. “We’re not forecasting a recovery in the IT sector just yet,” said CEO Craig Barrett.

Taiwan’s Nanya Technology Corp. will invest about $540 million in new chip equipment in 2003, more than a third over the $400 million figure the company gave earlier this year, citing increased demand amid short supply for DRAM chips. Of this amount, $333 million will go towards upgrading equipment at two existing fabs, while the company will split a $413 million investment in Inotera Memories Ltd, a 300mm JV with Infineon. Nanya also released preliminary capex projections for 2004: $180 million on its own fabs, and shared spending of $882 million in Inotera.

Texas Instruments has narrowed its expected 3Q03 overall revenue range to the higher end of earlier projections: $2.39 billion to $2.49 billion. Semiconductor revenue is predicted to be between $1.99 billion and $2.07 billion, up from earlier estimates of $1.89 billion to $2.05 billion. Revenues for TI’s sensors & controls and educational & productivity solutions business are also tracking up.

Taiwan Semiconductor Manufacturing Co. has raised its 3Q wafer shipment outlook to be up 10% compared with 2Q, slightly better than its earlier estimates of 5%-9%. Monthly revenues hit a record high in August to $535.3 million, a 35% jump from July. Looking ahead to 4Q, the company also said that wafer shipments in the year-ending period would be generally in line with 3Q figures.


Easily post a comment below using your Linkedin, Twitter, Google or Facebook account. Comments won't automatically be posted to your social media accounts unless you select to share.