SAN JOSE, Calif. Chartered Semiconductor Manufacturing Ltd. will ramp its 45nm process technology this fall amid a bleak business outlook for the chip foundry.
The Singaporean chip maker released Thursday (July 24) upbeat results of 18 percent sequential revenue growth and 88 percent capacity utilization for its second quarter. But revenue growth will slump to about four percent and utilization will fall to 84 percent in the coming quarter, executives predicted.
The company posted a net profit of $43.3 million in its second quarter, due in part to a tax benefit of about the same size. "We expect to post a net loss of approximately $29 million for the third quarter," said George Thomas, senior vice president and chief financial officer of Chartered, in a company statement.
The company blamed higher energy costs for contributing to the bleak outlook. "We have initiated discussions with our customers to share the cost increases," said Chia Song Hwee, president and chief executive of Chartered in the press release. The company has not seen any broad decline in demand, but "we continue to be cautious about the worsening economic situation," he added.
Meanwhile, Chartered announced it will spend about $160 million more than originally planned this year to ramp up its 45nm process which it expects to have in production in 2009. The additional capital expenses to stay on the technology curve will further challenge the company's profitability.
"We are at a point where we can no longer defer enabling 45nm capacity," said Chia. "As we further ramp our 65nm programs and execute on our 45nm offering and production ramp, we are addressing the margin challenges internally as well as in collaboration with our customers and suppliers in order to improve our financial performance," he said.
Chartered spent $42.8 million on R&D in the last quarter, up 11.3 percent from the second quarter of 2007 in part due to the 45nm ramp.
About 18 percent of Chartered's revenues now come from its 65nm process. Revenues from 130nm and 65nm processes combined make up 55 percent of the company's revenues.
Chartered shipped 548.5 thousand wafers in its last quarter, an increase of 43.7 percent compared to 381.6 thousand wafers in second quarter 2007. The company is seeing demand from communications and consumer companies rise gradually. Meanwhile, the portion of Chartered's revenues that comes from making computer chips has fallen from about 30 to 17 percent in the past year.