Semi sector shows further signs of woe
Analog and LSI the latest victims
Two semiconductor companies have announced poor financial results, casting more doubt on whether the industry is really on the path to recovery. Analog Devices said net profits were 81 per cent down while turnover also fell sharply for its third financial quarter, while LSI Logic issued a profits warning for its third quarter. Analog’s profit for Q3 fell to $8.8 million, from $46 million for the same quarter last year, while sales fell by seven per cent to $294.9 million. The announcement pulled down other semiconductor share prices on Wall Street. The company took a charge in the quarter of $17 million to cover redundancies and fab closures. Analog blamed the general decline in the chip industry, coupled with excess stock. LSI Logic warned its shareholders that its Q3 would show turnover falling by between five and 10 per cent compared to the quarter before, with earnings also reduced. The company blamed the shortfall on Asian financial woes. Last week, National Semiconductor said it expected its profits for the rest of its 1998 financial year to fall.