Another set of dismal results for chartered semiconductor

Losses inline with guidance. Chartered saw 3Q08 topline (excluding Silicon Manufacturing
Partners) come in 30.7% higher at US$463.6m which was below its guidance of US$469 – 481m
but exceeded market consensus at US$455.4m. Net losses in 3Q08 meanwhile stood at
US$26.9m, within the company’s guidance of US$24 – 34m but beating market consensus of
US$29.1m although it was way lower than the US$112.3m profit seen in 3Q07 when it was
boosted by a US$118.5m tax benefit. Margins were generally lower as the company experienced
lower selling prices and higher costs per wafer although shipments had increased 31.2% to
0.51m wafers YoY.
A litany of woes. Chartered’s dismal results were attributed to lower demand which was
worsened by the economic outlook. The company had also noted a decline in orders from mid-
Aug and customer requests to delay inventories. More importantly, management has also
mentioned that it is not certain as to when the bottom might occur and is forecasting for more
losses in 4Q08.
Outlook remains lacklustre. Chartered is expecting contracting demand in the foundry industry
going forward. This is inline with the macro outlook, as even the world’s largest chip contractor TSMC is forecasting declining 4Q sales and profit as the global economic downturn reduces
demand for wafers. Meanwhile, Chartered has guided for 4Q08 sales and net losses to be
around US$368m and US$57m respectively.




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