MEMSIC Blames Chinese Earthquake for Lower Q2 Financial Expectations

MEMSIC, a semiconductor firm which sells to handset manufacturers has lowered its financial outlook for the second quarter of 2008 - citing reduced demand following China's recent devastating earthquake. For the second quarter of 2008, MEMSIC anticipates revenue in the range of $5.5 to $5.6 million, compared to a prior expectation of revenue between $7.0 and $7.3 million.

The company said that the lower anticipated revenue reflects reduced demand for products in the mobile handset segment arising after the recent earthquake in China and increased pricing pressure.

Dr. Yang Zhao, Chief Executive Officer of MEMSIC said, "I am thankful that we did not experience any interruption of our operations as a result of the recent earthquake in central China. While sales in our automotive and industrial product segments are on track, in the mobile phone segment in China, we are seeing a combination of weaker demand, as attention in China turns toward earthquake relief and rebuilding, and consumer attention turns to saving for emergencies, and lower average selling prices due to continued competitive pressures. Because of this, we expect Q2 revenue to be below our original forecast. With continued healthy performance from our other segments, our longer term outlook remains positive. New product initiatives underway that broaden our market reach give us additional confidence."

Additionally, MEMSIC reported that Shang Hsiao has resigned from his position as Chief Financial Officer of the company, effective June 16, 2008, to pursue personal interests. Patricia Niu, Vice President of Finance, has been named Interim CFO while the company conducts an executive search for a new CFO.

Headquartered in the USA, MEMSIC, provides semiconductor sensor and system solutions based on integrated micro electromechanical systems, or MEMS, technology and mixed signal circuit design. Its accelerometer products are used to measure tilt, shock, vibration and acceleration - and are used in mobile phones as well as automotive safety systems and video projectors.

Last December, the company raised US$60 million in a stock market floatation, which valued the company at US$226 million.

Posted to the site on 12th June 2008