Article: Standard Microsystems Y2K Stockpiling Hurt 4Q

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Standard Microsystems Y2K Stockpiling Hurt 4Q (03/03/00, 1:36 p.m. ET) Semiconductor Business News

HAUPPAUGE, N.Y. -- The Y2K crisis that never materialized has affected the fourth quarter revenue for Standard Microsystems, which said Friday that its revenue would be off by as much as 25 percent.

The maker of PC I/O circuits, embedded controllers, and connectivy products stated that its revenue for the fourthquarter, ended Feb. 29, is expected to be between $31 million and $33 million, compared to $41 million for the quarter ended Nov. 30, 1999.

Normally, company revenue for the fourth quarter has been below the third quarter because of normal seasonal patterns in the PC industry, said Steven J. Bilodeau, chairman and CEO. But last year, OEMs stockpiled parts in anticipation of potential year 2000 date-rollover problems. Demand for parts has now been reduced as they worked down inventories.

"Our operating efficiency continues to improve and we are pleased that our gross margin percentage will remain strong in the quarter despite the temporary impact of Y2K on our revenues," said Bilodeau. "We believe that the Y2K inventory issues are now behind us. We look forward to continued operating strength that will fund the chip set development initiatives that will support long-term revenue growth."

SMSC said it expects to report between break-even and a modest profit for the quarter despite the revenue shortfall, reflecting continuing improvements in operating efficiencies.

NETsilicon, Waltham, Mass., experienced a similar drop-off due to Y2K orders. The provider of embedded networking semiconductors had one huge order that ballooned its third quarter revenue before returning to normal in the fourth quarter.

-- Jonathan Latimer (latimer@q-a.net), March 06, 2000


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