NEWBURY PARK, Calif.--Semtech Corp. here reaffirmed that revenues for the second quarter would be in a range of $38-to-$40 million--which is 33-to-38% below $60.5 million in Q1. The company also said it has decided to take a $14.0 million charge for write-down of inventories and discontinued products after a review of its chip portfolio.
Semtech said it will attempt to sell off discontinued commodity and application-specific standard products during the next two quarters, and if successful its results could benefit from extra gains.
"In the past three months, Semtech's outlook for second quarter revenue has been reduced by approximately 50% to our current outlook of $38.0-to-$40.0 million," said Jack Poe, chairman and chief executive officer the company, which supplies power management, system management, communications and tester chips.
Semtech said it has refocused the company's power management product line to emphasize higher complexity, higher margin products, which are aimed at portable systems, high-end desktop computers and servers, and telecommunications equipment. Semtech said it will pull out of certain commodity power IC product segments.
The company also said it has completed a headcount reduction announced last month and will take a charge of $1.1 million in the second quarter to cover the layoffs. The workforce reduction is expected to result in savings of $1.2 million per quarter, according to Semtech.
"The write-down of inventories reflects the dramatic change in our customers' forecasts over the last ninety days, especially in the ATE and communications infrastructure end-markets," Poe said. "The charge not only adjusts our inventory valuation to reflect these changed forecasts, but also focuses Semtech's sales and field engineering resources on designs which utilize our proprietary, high gross margin products."