SAN JOSE, Calif. Atmel Corp. on Tuesday (July 26) said that it is looking to cut costs amid ongoing losses in its chip business. The company is looking at layoffs, R&D cuts and a shift towards chip outsourcing with outside silicon foundries.
Atmel (San Jose) said revenues for the second quarter of 2005 totaled $412.2 million, versus $419.8 million in the first quarter of 2005 and $420.8 million in the second quarter of 2004.
Net loss for the second quarter of 2005 totaled $42.6 million or $0.09 per share. These results compare to a net loss of $43.0 million or $0.09 per share for the first quarter of 2005, as well as a net income of $11.7 million or $0.02 per share for the second quarter of 2004.
George Perlegos, Atmel's president and chief executive, indicated that the troubled company is looking to cut costs.
"While we are always looking to make our manufacturing more efficient, we are continuing to evaluate cost cutting measures and a move towards outsourcing in an attempt to better position the company for a return to profitability,” he said in a statement.
"To lower costs, we continue to evaluate reductions in our workforce and we expect to increase the amount of manufacturing that is outsourced,” he said. “By shifting our manufacturing strategy, we expect lower costs and lower capital expenditures, helped by selling or closing some of our older overseas facilities. We also expect to reduce our research and development costs by eliminating low potential projects and by reducing the number of process technologies in our fabs.”
As reported in May, Atmel said it intends to sell its semiconductor manufacturing facility in Nantes, France. In addition the company is considering several actions intended to reduce the company's labor force, reduce costs and return the company to profitability, its chief executive said (see May 17 story).
Meanwhile, Atmel’s ASIC revenues grew about 2 percent in Q2 sequentially, but microcontroller sales were flat. Sales in RF and automotive business unit in the second quarter were down 5 percent sequentially.
“During the second quarter, our non volatile memory business declined sequentially as we focus on serial based products,” he said. “However, within the segment, our serial EEPROM products grew 4 percent due to strength in the consumer and PC applications."
The company anticipates that for the third quarter of 2005, revenues and gross margins should be slightly up when compared to the second quarter of 2005.