Chartered ships 300-mm wafers, posts another loss

Chartered reported revenues of $194.0 million in the second quarter, up 7.0 percent sequentially and down 24.2 percent from the like period a year ago.

It posted a loss of $67.1 million in the quarter, compared to a net loss of $84.5 million in the previous quarter and net profit of $15.3 million in 2Q 2004.

Capacity utilization in second quarter was 65 percent, compared to 90 percent in the year-ago quarter, and 59 percent in first quarter 2005.

"As we had anticipated, we saw strength in the communications and computer sectors, partially offset by weakness in the consumer sector," said George Thomas, senior vice president and CFO of Chartered, in a statement. "We are pleased that Fab 7, our first 300-millimeter wafer fabrication facility, started commercial shipment in June 2005, instead of July as we had anticipated earlier."

Shipments in second quarter 2005 were 203.8 thousand wafers, a decrease of 16.5 percent compared to 244.0 thousand wafers in second quarter 2004, and an increase of 15.9 percent compared to 175.8 thousand wafers shipped in first quarter 2005.

Average selling price (ASP) was $913 per wafer in second quarter 2005, a decrease of 8.3 percent compared to $996 per wafer in first quarter 2005, primarily due to product mix and to a lesser extent, pricing pressure at the mature technology nodes.

The ASP decline included the impact from lower 0.13-micron revenues in second quarter 2005 due to a specific product from a customer in the consumer sector.

For Q3, Chartered is expected to report a loss of $47 million, plus or minus $5 million. Sales are projected to hit $283 million, plus or minus $4 million.

Utilization is projected to hit 70 percent, plus or minus 2 percent.

"In the third quarter, you should see Chartered delivering another critical milestone in the transformation of the company: volume shipments of leading-edge 90nm wafers," said Chia Song Hwee, president and CEO of Chartered, in a statement.

"As we continue to focus on execution and address new market opportunities, bringing Chartered back to sustained profitability continues to be a top priority for the management. As communicated earlier, we are targeting to reduce our breakeven point to about 75 percent utilization by the end of 2005, which is approximately 10 percentage points below the level in fourth quarter 2004. Pricing environment and product mix, both of which continue to be dynamic are the risks to our operating cost structure," concluded Chia.