MEMC saw 'turning point' for semi wafer sales in Q1
5/10/2012 12:57 PM EDT
SAN FRANCISCO—Silicon wafer supplier MEMC Electronic Materials Inc. Wednesday (May 9) reported a first quarter loss of $92 million, but said it expects sales for its semiconductor materials business unit to improve by at least 5 percent sequentially in the second quarter.
Ahmad Chatila, MEMC's CEO, said through a statement that the company believes the first quarter represented a turning point for its semiconductor materials business. "Already in the second quarter, we are seeing improved order volumes and firming pricing," Chatila said.
Charila said solar markets remain challenging, but that MEMC's restructuring to lower costs and improve its competitive position remains on track. The company's previously announced restructuring actions included the shuttering of its polysilicon plant in Merano, Italy, capacity reduction at plants in Portland, Ore., and Kuching, Malaysia, supplier contract terminations and the elimination of about 1,300 jobs, among other actions, MEMC said.
MEMC (St. Peters, Mo.) reported first quarter sales of $519.2 million, down 28 percent compared to the fourth quarter of 2011 and down 29 percent compared to the first quarter of 2011. MEMC said the sequential decline was primarily driven lower solar project sales, significantly lower solar wafer volume and pricing and weaker semiconductor wafer volume and pricing, while the year-over-year decline was attributed to weakness in semiconductor wafer and solar markets.
MEMC reported a net loss in accordance with generally accepted accounting principles (GAAP) of $92 million, or 40 cents per share, narrowed from a loss of $1.48 billion in the fourth quarter but wider than the company's $4.5 million GAAP net loss for the first quarter of 2011.
MEMC reported that its semiconductor materials business had $216 million in first quarter revenue, down 5 percent from the previous quarter and down 16 percent from the year-ago quarter. The year-over-year decline was primarily due to lower small diameter wafer volume and weaker pricing across all diameters, partially offset by higher large diameter wafer volume., MEMC said, while the sequential decrease was primarily driven by weaker wafer pricing across all diameters.
The semiconductor materials business posted an operating loss of $12.5 million in the first quarter, compared to an operating loss of $61.4 million in the fourth quarter of 2011 and a profit of $8.4 million in the first quarter of 2011. First quarter operating results included a $4 million insurance payment related to damage from the March 2011 earthquake and tsunami in Japan.
Sales for MEMC's solar energy segment were $303.2 million in the first quarter, down 38 percent from the fourth quarter of 2011 and down 37 percent from the first quarter of 2011. The firm cited weaker solar wafer pricing and volume and lower solar project sales for the declines.
Solar wafer sales to external parties are expected to decline to minimal levels due to the company's strategic shift to primarily supplying wafers for internal consumption, MEMC said. As of Jan. 1, MEMC's solar materials and SunEdison businesses were combined into one solar energy business unit.
MEMC said it expects revenue for its semiconductor materials business to increase 5 to 10 percent sequentially in the second quarter. The company did not provide specific revenue and earnings guidance for the second quarter, citing uncertainty in the semiconductor and solar markets.