SANTA CLARA, Calif. -- Semiconductor packaging and test contractor ChipPac Inc. today reported a 32% sequential decrease in net revenues to $89.9 million in the first quarter, compared to $132.2 million in Q4 of 2000. ChipPac's sales were 8% lower than $97.5 million in the first quarter of 2000.
ChipPac's net loss, including restructuring charges, totaled $9.7 million in the first quarter vs. a net loss of $555,000 in the same period last year. In Q4 of 2000, the company posted a net income of $2.7 million.
"We took decisive action to reduce our cost structure this quarter in response to thechanging economic conditions, reducing our costs significantly from the prior quarter," said Robert Krakauer, chief financial officer of ChipPac. "Total savings amounted to roughly 8.5% of revenue, excluding depreciation and material cost savings."
Two months ago, ChipPac announced it was reducing its headcount by 10-20% in an attempt to lower losses in the current semiconductor slump (see Feb. 6 story). The industry's downturn also caused ChipPac to scrap its plans to acquire Viko Test Labs in Santa Clara, which provides chip testing, burn-in, failure analysis, and wafer-sort services (see March 22 story).
Krakauer said the company has reduced its capital spending plans to $45 million from a previous estimate of $90 million in 2001.
ChipPac now expects its second quarter revenues to be sequentially 5-to-10% lower than Q1 with a net loss of $0.08-to-0.11 per share, said Dennis McKenna, chairman and CEO of the company. ChipPac's net loss in Q1 was $0.14 per share, which matched Wall Street's consensus, based on a survey by First Call/Thomson Financial.
"We are seeing positive signs that some segments, mainly computing and wireless, are working through inventories quicker than others," McKenna said. "Intel confirmed this view on its recent conference call, which is a positive for the second half of the year. Power packages have been relatively stable in comparison to other end markets.
"This resiliency and the prospects for the second half are encouraging based on the new customer qualifications and production ramps being forecasted," he said. "In general, though, our visibility remains limited as both end markets and our customers are keeping inventories and forecasts at cautious levels."