December 29, 2000, 2:25 PM — THE WORLD'S THIRD-LARGEST contract chip manufacturer, Chartered Semiconductor Manufacturing, has warned of a difficult financial year ahead, saying it expects a fall in sales in the first quarter rather than the 5 percent increase it had previously expected.
The company is experiencing turbulence in many of its end product markets, with short-term demand being adversely impacted by inventory corrections, it said in a statement issued Thursday. The company said it is also concerned about the near-term economic outlook.
"If recent market trends continue, it appears likely that Chartered will need to lower its prior guidance for year-2001 revenue and earnings," the company said in the statement.
The warning follows similar calls made by several of Chartered's biggest customers and partners such as Lucent Technologies, Agilent Technologies, and communications chip company Conexant Systems, which said Wednesday it expects revenue for its first fiscal quarter of 2001 to be 20 percent lower than originally forecast.
Chartered said that revenue and profit for its fourth quarter ending Dec. 31 would be in line with earlier statements.
Chartered's stock price dropped 7.5 percent or $2.31 to close at $28.44 on the Nasdaq exchange Wednesday and a similar percentage in early Thursday trading on the Singapore Exchange.
Earlier this month, Taiwan's United Microelectronics Corp. (UMC), the world's second-biggest contract chip manufacturer, said that it expects first-quarter orders to be some 10 percent to 15 percent lower than for the current quarter.
These two companies, together with the world's biggest contract chip manufacturer, Taiwan Semiconductor Manufacturing Co. (TSMC), are feeling the effects of the slowdown in the PC industry, which is a major semiconductor customer