Chartered's loss widens with 59% utilization; projects Q2 deficit

The net loss for the Singaporean foundry provider was $84.5 million in the period, compared to a net profit of $1.9 million a year ago. In the previous quarter, Chartered posted a loss of $26.8 million.

Capacity utilization in first quarter was 59 percent, compared to 81 percent in the year-ago quarter, and 61 percent in fourth quarter 2004.

Shipments in first quarter 2005 were 175.8 thousand wafers (eight-inch equivalent), a decrease of 24.5 percent compared to 232.8 thousand wafers in first quarter 2004, and a decrease of 8.3 percent, compared to 191.8 thousand wafers shipped in fourth quarter 2004.

Average selling price (ASP) was $996 per wafer in first quarter 2005, essentially flat compared to $994 per wafer in fourth quarter 2004.

"The revenue decline was primarily due to weakness in the communications sector which was partially offset by strength in the consumer sector," said George Thomas, senior vice president and chief financial officer of Chartered, in a statement. "However, we continued to see increased adoption of our advanced technologies as our leading-edge 0.13-micron revenues increased 21 percent sequentially and represented a record 32 percent of our total business base revenues."

For the second quarter, Chartered projected sales of $193 million, plus or minus $4 million, or up 4-to-9 percent over Q1. The company expects another loss of $83 million, plus or minus $5 million.

Fab utilization is projected to hit 65 percent, plus or minus 2 percent.

"In line with what we had expected earlier, we believe we have seen the trough of the current cycle at Chartered in first quarter 2005 as our utilization bottomed to 59 percent," said Thomas.

"Though advanced technology shipments are expected to increase significantly during the year compared to the previous year, we see a temporary pause in the growth of our 0.13-micron revenues in the second quarter due to a specific product from a customer in the consumer sector reaching its end-of-life cycle," he said. "While we are working on ramping new products from the same customer, we expect 0.13-micron revenues in second quarter 2005 to be lower than the first quarter and represent around 24 percent of our total business base revenues."

"We are encouraged by the positive signs we are seeing from our customer base and excited about the opportunities that are ahead of us in the second half of 2005 as we ramp our first 300mm fab, Fab 7, for manufacturing 90-nm SOI products and further expand our customer engagements in 0.13-micron and 0.11-micron technologies," said Chia Song Hwee, president and chief executive in a statement.

"As we continue to address the growth opportunities ahead of us, bringing Chartered back to sustained profitability continues to be a top priority for the management," he said. "We are still targeting to reduce our breakeven point to 75 percent utilization by the end of 2005, which is approximately 10 percentage points below the level in fourth quarter 2004."