January 7, 2005 – Semiconductor industry firms are prepping their final calendar 4Q04 results, with most showing the effects of an industrywide slowdown.
Xilinx Inc., San Jose, CA, said 3Q04 revenues would be down by 11%-12% sequentially, rather than previously estimated 5%-8%, due to weak business in December across all geographies. The company reported 2Q04 revenues of $403.3 million. The new range of $354.9-$358.9 would be 5%-6% below Wall Street expectations.
National Semiconductor Corp., Santa Clara, CA, plans to reduce its workforce by about 6% in an effort to cut costs, after seeing its fab utilization rates plummet to the mid-60% range in 4Q04 after running in the mid-90s for most of the year. The layoffs will impact sites in the US, Europe, and Asia, affecting personnel in factories as well as positions from several product lines and support functions. Charges of approximately $22-$26 million will be recorded mostly in the company’s fiscal 3Q05 ending in February. The actions reflect an ongoing effort to focus on higher-margin analog products, and less on commodity products, stated chairman, president, and CEO Brian Halla.
Production-line contamination problems in 4Q04 reduced yields and delayed shipments, causing probe-card manufacturer FormFactor Inc., Livermore, CA, to reduce its 4Q04 revenue and bookings guidance. Preliminary 4Q revenue of $46.1 million is down from earlier estimates of $50.0-$53.0 million; bookings were $40.7 million but did not materially affect revenue. Earnings also have been reduced from 18-19 cents/share to 12-13 cents/share, due to lower revenues and increased spending to bring the affected lines back up. “We have identified root causes of the wafer yield loss and are implementing corrective action steps,” said president Joe Bronson, adding that the startup of a new factory would further ease capacity constraints.
Meanwhile, LSI Logic Corp., Milpitas, CA, has raised its projected 4Q04 revenue range to $415-$420 million, up from $360-$390 million, which would be about 10% higher sequentially. Growth in storage and consumer businesses, including ASICs, standard products, and RAID storage adapters, indicates inventory corrections in those markets has run its course, stated chairman and CEO Wilfred Corrigan. A $180 million asset impairment charge will push the company into the red in 4Q, with an estimated net loss of 53-55 cents/share.