SAN FRANCISCO—Cypress Semiconductor Corp. Tuesday (March 6) cut its sales target for the first quarter, citing order decreases and lower than expected revenue from the distribution channel.
Cypress (San Jose, Calif.) said it now expects to be between $180 million and $190 million, which would represent a sequential decrease of 21 to 26 percent compared to sales of $242 million in the fourth quarter of 2011. Cypress previously said it expected first quarter sales to be between $200 million and $210 million.
"We have recently seen some order decreases, mostly in certain wire line and handset customers. In addition we are seeing weaker than expected revenues from our distribution channel, mainly due to lower turns business in Europe and Asia," said Brad Buss, Cypress's chief financial officer, in a statement. "These factors are resulting in a negative impact to our previously expected Q1 2012 revenue."
Buss said Cypress's customer backlog and bookings stabilized in January and that the company saw improvement in business conditions over the past six weeks. "We continue to believe that Q1 will be the bottom for revenue and bookings, and at this point expect Q2 revenue to grow sequentially," Buss said. "However the macro environment and order patterns remain very fluid and lead-times are near historical lows, impacting visibility."
Cypress said it expects its first quarter gross margin to be between 53 and 54 percent, down mainly due to lower fab utilization as the company reduces wafer starts to manage inventory for the first and second quarters of the year.