SAN JOSE, Calif. -- Hit by a slowdown in its chip business, Cypress Semiconductor Corp. here today become the latest chip maker to issue a warning about its financial picture in the fourth quarter.
The disclosure by San Jose-based Cypress follows similar announcements made by Altera, Fairchild Semiconductor, Mosel Vitelic, and other chip makers in recent days. Another concern is that some major OEMs have also lowered their previous forecasts, including Gateway, Lucent, among others.
There are other ominous signs in the market. A slowdown in the PC market, coupled with an inventory glut with DRAMs and other key components, is prompting analysts to believe that the market is headed for a major slowdown.
Meanwhile, Cypress said it is reducing its guidance for sequential revenue growth for its fourth quarter ended Dec. 31, 2000. Based on slower sales in a range of end markets, it now anticipates quarter-on-quarter revenue growth of 4% to 5%. Analysts also project that the company will earn $0.76 a share for the period.
For the third quarter of this year, ended Oct. 1, the company reported sales of $356.2 million, up 83% from the like period a year ago. It also reported a net of $100.5 million, or $0.70 a share, in this period, compared to $25.5 million, or $0.21 a share, a year ago.
In the fourth quarter of last year, it reported a profit of $47.5 million, or $0.39 a share, on sales of $207.9 million.
On a positive note, the company still expects to post record sales and profit for that quarter, said T. J. Rodgers, chief executive of Cypress. "Bookings are reasonable and should allow us to grow both in revenue and earnings in the first quarter of 2001," he added.