While Philips originally forecast a low-single-digit sequential increase in semiconductor sales in the current quarter, it now expects them to be flat, though this will be 27% higher in dollar terms on the third quarter of 2003.
Scott McGregor, chief executive of the semiconductors division, said that its book-to-bill ratio has slipped below the 1 level, while at the end of the second quarter, when its fabs were working at 99% capacity, it was 1.13.
Fears for the future of Philips’ chip operations began when McGregor announced he was quitting the company at the end of the year. Though skeptics felt that Philips’ lack of ambition for its chip business lay behind the move, McGregor insisted that it was about personal considerations – better-quality English-language schooling for his children.
However, the chip operation sits uneasily in a Royal Philips Electronics NV now focused on consumer electronics, lighting and medical systems and there is growing speculation that it may be eventually deemed non-core and sold to a pure-play semiconductor manufacturer.
Austin, Texas-based Cirrus has cut its forecast for second quarter revenue to $51m to $52m, compared with its original estimate in July of sales in the range of $61m to $68m. The market is deteriorating rapidly, because only a month ago Cirrus updated its forecast to the bottom end of the original range.
The company blamed an industry-wide inventory correction within the supply chain, for both DVD players and recorders. Demand for its analog integrated circuits used in industrial applications remained relatively strong.
In August, Cirrus cut its workforce by 7% and it expects to record a restructuring charge of $1.5m for headcount reductions and facility consolidation.
