Chipmakers’ mid-quarter outlooks mixed

December 9, 2004 – Several chipmaking firms have tightened their projections, mostly in line with sentiments that a slowdown continues–but with one big exception.

Intel Corp., Santa Clara, CA, raised its projections for 4Q04 sales to a range of $9.3-$9.5 billion, up from earlier estimates of $8.6-$9.2 billion, thanks to stronger-than-anticipated demand leading into the holiday season. The midpoint of the upgraded projection would translate to an 11% sequential increase, compared with an average 8% quarter-on-quarter increase over the past five years, capping “a record quarter and a record year,” said Intel CFO Andy Bryant. Intel added that inventory will be reduced by “several hundred million dollars” in the quarter, compared with projections of a $43 million reduction.

Meanwhile, Texas Instruments Inc., Dallas, TX, tightened its overall revenue expectations for 4Q04 to $3.02-$3.14 billion, compared with a previous range of $2.96-$3.20 billion, with a midrange profit target of $0.25-$0.27/share. Semiconductor revenues are expected to come in slightly at the low end of a previously-projected range of $2.63-$2.83 billion. The company indicated order trends are “generally pretty soft,” and that inventory is still an issue although it is being worked off.

Xilinx Inc., San Jose, CA, said that fiscal 3Q04 sales will be down 5%-8% sequentially, rather than an earlier-estimatd 2%-6%, due to weaker-than-expected bookings across all geographies in November after strong sales in October. An increase in bookings in early December is not expected to continue through the rest of the month, along seasonal patterns.

Sales at Taiwan’s top two foundries continued to slide in November from the previous month, but still show double-digit increases from a year ago. TSMC’s November revenue was about $649 million, down 9% from October’s $711 million and the third straight monthly decline, but up 13% from $573 million in November 2003. The company blamed declining wafer shipments and a stronger New Taiwan dollar. UMC reported November sales of $289 million, down about 8% sequentially but an increase of 21% compared with a year ago. For the year through November, TSMC and UMC report sales growth of 29% and 42%, respectively, from the same period in 2003.


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