Ross Technology Inc, the Sparc chip designer, is in big trouble and, when you hit problems in this ferociously competitive business, they feed upon each other so that once you lose touch with the market you are suddenly fighting for survival. For its first quarter to June 30, the company reported a net loss of $5.2m compared with a profit of $4m in the same period the previous year. The problem is that few companies want its chips any more. Revenue dived by 62% to $11.8m and the only comfort it can draw is that the figure was up on the miserable $11.6m recorded in the previous three months. Ross’ parent Fujitsu Ltd has already guaranteed a $50m line of credit through April 1998 and is bankrolling the development of a V9 Sparc Architecture RISC called Viper which will be compatible with the Sun Microsystems Inc 64-bit UltraSparc RISC which Fujitsu is already using in its own servers. Viper’s due in 1999. Fujitsu’s $50m credit facility gives Ross enough capital to get through the current financial year. But Ross concedes it may need additional sources of funds in the future and cannot guarantee that Fujitsu will help it out next time. Ross is currently engaged in a battle to stop its shares being thrown off the Nasdaq exchange as it doesn’t meet the requirements for net assets.
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