SOUTH PORTLAND, Maine -- Fairchild Semiconductor International Inc. today reiterated its forecast of $490 million in sales during the current fourth-quarter period. Fairchild's guidance shows a 3% sequential gain in revenues from $476 million posted in the third-quarter period, which ended Oct. 1.
"For all of 2001, we expect sales growth of about 20%," said Kirk Pond, chairman, president and CEO of Fairchild Semiconductor. "This is in line with the recent forecast issued by the SIA for the total semiconductor market," he said, referring to the Semiconductor Industry Association's forecast of 22% chip market growth next year (see Nov. 1 story).
"This reflects our outlook that after the seasonally soft first quarter, sales will strengthen through the second quarter and second half of the year," Pond added.
The Fairchild Semiconductor chief executive said bookings were soft, as expected, in the first part of the current fourth quarter period as chip customers adjusted their backlogs to balance inventory levels for more modest growth in 2001. "These inventory-driven backlog adjustments are continuing," Pond said. "We are taking steps to adjust our product mix and production levels to take advantage of immediate opportunities. We believe backlog adjustments will diminish toward the end of the quarter, and we believe we can book and ship enough additional orders to achieve our $490 million sales target.
In the third quarter, Fairchild posted $476 million in sales, a 9% sequential increase from the prior three-month period. The company's adjusted net income for the third quarter was $84.0 million (see Oct. 24 story).
"We continue to believe that this period of slower sequential growth is due to inventory adjustments in segments of the communications and computer markets," said Joe Martin, executive vice president and chief financial officer. "For the last 18 months market forecasters have projected 2001 growth to slow to a still-healthy 20-plus-percent growth rate from the torrid 35% pace of 2000, and our long experience has been that when growth rates slow even slightly, backlogs and inventories need to be adjusted."
The CFO added that "although our gross margin growth may be tempered somewhat through this slower period, we are still on track to our long term target of 40%."
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