Fremont, Calif.-based assembly and test house ChipPAC Inc. today reported Q1 revenue declined 4.4 percent sequentially to $88.6 million, per the company's previous guidance, but still up 11.9 percent year over year

As a result, the company posted a net loss of $9.7 million or 10 cents per diluted share.

"The historically weak first quarter met our expectations. January was weak due to the prior year-end push but we saw improvement month over month as the quarter progressed," Dennis McKenna, chairman and CEO, said in a statement. "This improvement continued into April. Contributing to the improvement was the growth of our new customers, three of whom broke into our top ten customer list. This is a significant achievement and this diversification has resulted in our largest customer accounting for only 14 percent of revenue in the first quarter," McKenna said.

Cell phones, wireless LAN and wireline businesses showed sequential improvement for the fifth quarter in a row, McKenna reported. ChipPAC's die stacking and RF test technology, combined with its geographically targeted manufacturing and market leading customers, is proving to be a successful growth strategy, he said.

"We reduced selling, general and administrative expenses, while increasing research and development on a year over year basis as we continue to focus on the development of new technologies," Robert Krakauer, CFO, said in a statement. "We believe we are starting to see a stabilization of the business as evidenced by sequentially flat unit volumes and average selling prices appearing to follow a more traditional level of decline."

The company forecasts that it will reach a breakeven point in 2003. For Q2 ChipPAC believes it will experience sequential revenue growth of 10 percent to 15 percent, with a further improvement in net loss in the range of 2 cents to 5 cents per share.

Strong unit volume growth will drive utilization rates into the 70 percent range, the company said.

"The strength of our guidance is based on our customers, new product cycles, introduction of new technology products from ChipPAC, some inventory replenishment, and overall market share gains within our targeted areas," McKenna said. "Finally, new business activity remains high, which provides additional confidence in our prospects for growth."

By: DocMemory
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