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Chartered still losing money, cuts capex
Chartered still losing money, cuts capex
By Mike Clendenin, EE Times
January 28, 2003 (8:08 p.m. EST)
URL: http://www.eetimes.com/story/OEG20030128S0039
TAIPEI, Taiwan Chartered Semiconductor Manufacturing sounded the bell of caution Tuesday, saying 2002 wasn't as good as it hoped for and predicting slow growth for 2003. Consequently, the Singapore foundry will cut its capital expenditures to $275 million, compared to $420 million last year. "At the beginning of the year, most market observers expected that 2002 would be a year of solid growth," said Chia Song Hwee, president & CEO of Chartered. "However, the latest estimates indicate that there was little or no year-over-year growth as three quarters of sequential increase were followed by an abnormally low fourth quarter." Chartered brought in $107 million in the fourth quarter, down 16 percent from the third quarter, a decline it attributed to the computer and memory segments. Year on year, fourth quarter revenues were up nearly 42 percent, thanks largely to the communications segment, the company said. However, Chartered is still losing money, something it has done for several quarters. It brought in $409 million in 2002, down 2.9 percent from $462.0 million the year before, and it lost $417 million, worse than the $384 million lost in 2001. It lost nearly $109 million in the fourth quarter. Chartered expects things to improve in 2003, but it may not be anything to get excited about. In the short term, things will get a little worse before they get better. About 60 percent of its lines will be idle in the first quarter, average selling prices will be down and revenues will fall 5 percent to 10 percent. It expects a loss of approximately $96 million to $99 million in the first quarter. "We believe that 2003 will be a transition year for the semiconductor industry, with a somewhat weak first half followed by accelerating growth in the subsequent quarters, as the global economies begin to improve," said George Thomas, vice president & CFO of Chartered. "We continue to expect that the foundry industry will grow at approximately twice the rate of the broader semiconductor industry in the coming years, driven by the strong growth of fabless companies and accelerated strategic outsourcing by integrated device manufacturers."
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