SAN FRANCISCO—Wafer probe card maker FormFactor Inc. and chip vendor Sequans Communications SA Tuesday (Dec. 13) lowered their sales targets for the fourth quarter, citing difficult market conditions.
FormFactor (Livermore, Calif.) said it now expects fourth quarter sales to be between $28 million and $31 million, down from a previous range of $30 million to $34 million. The cut was made primarily due to the challenging DRAM pricing environment and softening demand for probe cards, FormFactor said.
"Industry conditions have further deteriorated over the course of the past two months resulting in slow demand for our products," said Tom St. Dennis, FormFactor CEO, in a statement.
Sequans (Paris) slashed its outlook for fourth quarter sales to about $11 million, down from a previously guided range of between $20 million and $23 million. The firm, which supplies LTE and WiMAX chips to equipment manufacturers for mobile operators, said it lowered its outlook because its largest customer cancelled 60 percent of a large chip order planned for this month.
"As a result of this unexpected development, which the customer has informed us is due to the worldwide economic situation and reduced WiMAX demand, we now assume that we will make no shipments of product to, and recognize no revenues from, this customer in the first quarter of 2012," said Georges Karam, Sequans CEO.
While the cancellation is disappointing, Karam said Sequans is encouraged by the company's design wins and the level of interest in its LTE products.
"We continue to believe that our LTE business will begin to ramp in the second half of 2012," Karam said. "Unfortunately, the small quantities of LTE chips we expect to ship in the first half of 2012 will not be sufficient to offset the greater than expected decline in our WiMAX business."
A number of semiconductor industry firms have lowered their fourth quarter outlooks in recent weeks, including No. 1 chip vendor Intel Corp., which lowered its fourth quarter sales target by 6.8 percent Monday, citing a slowdown in PC shipments caused by a shortage of hard disk drives.