Chip Manufacturer to Cut 600 Jobs

Semiconductor firm, Chartered Semiconductor Manufacturing - which makes chips for the likes of Qualcomm and Broadcom - has announced that it is to cut 600 jobs after it posted a 4th quarter loss. The firm reported a loss of US$97 million for 2008 - compared to a profit of US$10.3 million a year ago. Annual revenues were US $1,661.1 million in 2008, up 22.5 percent from US $1,355.5 million in 2007.

George Thomas, senior vice president and CFO of Chartered, commented: "As a result of the unprecedented rate of decline in semiconductor demand worldwide, Chartered revenues in fourth quarter 2008 were down 24 percent, and revenues including our share of SMP were down 26 percent compared to the previous quarter, in line with the guidance we had provided on December 12, 2008. Revenues from 0.13-micron and below technologies, including those from 65 nanometer (nm), accounted for 58 percent of our total business base revenues. Revenues from 65nm alone, including both SOI and bulk technologies, represented 23 percent of our total business base revenues,"

Shipments in fourth quarter 2008 were 368.8 thousand wafers, a decrease of 3.7 percent compared to 383.2 thousand wafers in fourth quarter 2007. Shipments in fourth quarter 2008 decreased by 28.3 percent compared to 514.3 thousand wafers shipped in third quarter 2008. Shipments including Chartered's share of SMP were 377.7 thousand wafers, a decrease of 9.1 percent compared to 415.5 thousand wafers in fourth quarter 2007. Shipments including Chartered's share of SMP in fourth quarter 2008 decreased by 30.6 percent compared to 544.5 thousand wafers shipped in third quarter 2008.

Capacity utilization in fourth quarter 2008 was 59 percent compared to 81 percent in the year-ago quarter, and 85 percent in third quarter 2008. Capacity utilization was 79 percent in 2008 and 2007.

As a result of further decline in the utilization rate into the first quarter and lack of visibility in the end markets, Chartered is reducing its worldwide workforce by approximately 600 people, or about 8 percent of its total employment. Chartered expects to incur a one-time charge of approximately US $8 million in the first quarter associated with this workforce reduction. Annual savings in payroll and benefits is expected to be approximately US $16 million.

"While the market demand is showing further contraction, the three near-term priorities that we had set for ourselves: lowering our breakeven utilization level; positioning for early phase of demand recovery; and preserving our cash and liquidity position continue to be key focus areas for the management," said Chia Song Hwee, president & CEO of Chartered.

Posted to the site on 30th January 2009