Cypress Sees Quarter Hurt by Chip Slump

SAN JOSE, Calif. – Integrated circuits and memory products maker Cypress Semiconductor Corp.  said on Monday its second-quarter results will be lower than it had previously estimated as hopes of recovery in the beleaguered semiconductor segment have stalled.

``Cypress's revenue has literally been cut in half over the last six months,'' Cypress Chief Executive T.J. Rodgers said in a statement. ``Our near-term goal is to endure this severe decline without losing any money.''

The company said it now expects second-quarter revenue of $175 million to $185 million, down 29 percent to 33 percent from the first quarter's $262 million and below earlier forecasts of $200 million to $210 million.

Cypress said it sees earnings, excluding goodwill amortization costs, of between break-even and 2 cents per share.

Analysts had expects results ranging from a loss of 2 cents per share to a profit of 7 cents, with a mean estimate of a 2-cent profit, according to research firm Thomson Financial/First Call. Revenue was expected at about $201 million.

In second quarter 2000, the company earned 50 cents per share on revenue of about $300.1 million.

``Business conditions have not materially improved in the market segments that we serve,'' Rodgers said.

Business has been slow to recover in all of the company's units, he said. He described the wide area network and storage area network segments, which represent some 50 percent of revenue, as ``practically dead'' in the current quarter, suffering from both slack demand and high inventory.

The wide area network segment is not likely to show positive movement until the beginning of 2002, he said.

Cypress' computation segment has also stalled, though it is still likely to strengthen in the second half of 2001, he said. Inventory levels remain high at its wireless segment, which will probably not resume growth until the fourth quarter of this year.

Despite the sobering news, Cypress shares were up 35 cents at $21.95 in midday New York stock exchange trade, the low end of a 52-week range of $13.75 to $55.56.

However, shares of other chipmakers were down. Intel Corp. fell 50 cents to $28.24, and Advanced Micro Devices Inc. eased $1.06 to $28.54.

The Philadelphia Stock Exchange semiconductor index was down 12.33, or 2 percent, at 605.27.