Wednesday, March 5, 2003
Cypress Semiconductor said it is cutting an additional 150 workers from its payroll, even as it expects Q1 revenues to be slightly higher than its previous guidance.
Cypress said back in January during its Q4 2002 earnings report that it would seek more cost-cutting measures, and hinted that this might come through head count reductions. The current layoff follows one in Q4, in which the chipmaker axed 380 jobs.
Cypress plans to further lower its pro forma break-even sales through the current round of layoffs from $190 million to $185 million. Cypress still expects gross margin to improve 100 to 200 basis points to 42 percent to 43 percent in the current quarter and to realize a slight improvement in profitability, aided by earlier cost-reduction measures.
Cypress, which posted revenue of $174.4 million in Q4, had forecast revenue to be flat during the current quarter. Cypress now expects revenue to grow approximately 2 percent to $178 million, aided by stronger demand in wireless and computation markets.
Cypress started Q1 needing 43 percent of turns business to meet its guidance for the quarter. Turns have been slightly better than expected two months into the quarter and are expected to continue at a good pace, the company said. It expects to post a book-to-bill ratio for Q1 better than 1.0.
"We believe SRAM pricing was better than expected and stronger PC clocks were driven by the whitebox market," Lehman Brothers analysts Dan Niles and Malcolm Shu said in a research note.
By: DocMemory
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