Feeds

ATI slashes Q3 sales forecast

Problems shipping high-end chips?

  • alert
  • submit to reddit

Boost IT visibility and business value

ATI has warned that its Q3 revenues will be around five per cent below the range it forecast when it published its Q2 figures on 24 March.

Back then, it said Q3 sales would lie between $560m and $600m. This week, it said the figure would be closer to $530m, 12 per cent below the top of that range.

That's still 7.8 per cent up on Q3 FY2004's total, $491.5m, but it marks a 12.8 per cent decline on Q2 FY2005's $608m sales. However, unit shipments will be up five per cent sequentially, it said.

ATI blamed the dip on growing demand for its lower-end products, which reduced gross margins to 29 per cent from around 34 per cent in the previous quarter.

The chip maker also pointed to "lower-than-anticipated yields on certain products due to operational issues in the packaging and test area of the manufacturing process". It's tempting to speculate that was the result of the fire last month at Advanced Semiconductor Engineering's Chungli chip packaging and testing plant, though ATI made no comment this week on the effect of the fire. ATI is an ASE customer. At the time of the blaze, however, Credit Suisse First Boston claimed the impact of the fire could be "material" as the blaze tightens an "already short" supply of flip-chip substrates.

"The combination of tight supply and a four- to six-week substrate cycle time could disrupt ATI's high-end shipments through at least June," CSFB said. And, indeed, ATI's Q3 has been characterised by a shift away from sales of high-end products.

On the positive side, ATI said its desktop chipset business "exceeded expectations" during the quarter by "growing dramatically". It said it expects Q4 FY2005 revenues to reach $600m.

ATI will publish its Q3 figures on 23 June. ®

Related stories

ATI unveils CrossFire
Nvidia preps GeForce 7800 GFX
Crytek: new ATI chip will support Shader 3.0
ASE factory blaze impact 'limited'
ATI posts 'strong' Q2 sales gains

Build a business case: developing custom apps

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
prev story

Whitepapers

Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up distributed data
Eliminating the redundant use of bandwidth and storage capacity and application consolidation in the modern data center.
The essential guide to IT transformation
ServiceNow discusses three IT transformations that can help CIOs automate IT services to transform IT and the enterprise
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.