STMicroelectronics Expects Reduced Q2 2001 Revenues

June 21, 2001 by Jeff Shepard

STMicroelectronics (Switzerland) announced that it expects revenues for the second quarter, ending June 30, 2001, to be in the range of $1.55 billion to $1.60 billion, below the $1.65 billion to $1.8 billion range previously anticipated. This reflects year-over-year and sequential sales declines in telecommunications and computer peripheral applications.

The sequential revenue decline anticipated for the second quarter is likely to result in a gross margin of approximately 38 percent, which would be below the lower end of the guidance provided in a previous news release. In addition to the difficult pricing environment, the company's gross margin has been affected by lower-than-expected utilization rates at ST's 6in wafer fabs. By contrast, the company is maintaining utilization rates averaging 85 percent at its five leading-edge 8in wafer fabs.

The company stated that while it is disappointed by recent order postponements, it continues to maintain relatively strong financial performance and to increase market share in its targeted applications. ST continues to implement cost-control initiatives in response to market and economic conditions.