3 Chip Makers Report More Losses

Three major chip makers Wednesday reported large losses and plummeting sales for the third quarter, punctuating the worst year so far for the semiconductor industry.

But chip makers Advanced Micro Devices Inc., Broadcom Corp. and Texas Instruments Inc. predicted that sales would edge up soon, even while cautioning that the Sept. 11 terrorist attacks have shaken consumers so much that forecasts are difficult.

Analysts had expected the third quarter to be the bottoming-out period for the battered semiconductor industry. But “it’s going to take three to six months longer because of the impact of Sept. 11,” said analyst Mark Edelstone of Morgan Stanley Dean Witter in San Francisco.

Although the attacks and the soured economy have taken a toll on semiconductor makers, overly optimistic sales forecasts also contributed to the slump. The projections resulted in a buildup of inventory, which the industry is working to clear out.

AMD posted its first quarterly loss in more than a year--$186.9 million, or 54 cents a share, compared with net income of $408.6 million, or $1.18 a share, in last year’s third quarter. Excluding charges related to job cuts and closing two plants, AMD lost $97.4 million, or 28 cents a share, in line with a warning it issued Oct. 5. Sales fell 37% to $765.9 million.

Executives, however, were bullish. They predicted that the Sunnyvale, Calif., company would use new products to propel sales next year. Broadcom posted a loss of $1.6 billion, or $6.36 a share, compared with a profit of $798 million a year ago. Sales dropped 33% to $213.6 million.

The Irvine company wrote off $1.2 billion of its $4.2 billion in goodwill--the amount it paid above the market value for its last 12 acquisitions. Many of those companies are research and development operations with little or no sales.

Excluding goodwill and other one-time charges, the company lost $34 million, or 13 cents a share, slightly better than the 15-cents-a-share loss expected by analysts surveyed by Thomson Financial/First Call.

Texas Instruments lost $117 million, or 7 cents a share, compared with a profit of $676 million, or 38 cents a share, a year ago. Excluding one-time items, the company lost $57 million, or 3 cents a share, narrower than the 4 cents-a-share loss analysts had expected. A year earlier, the Dallas company earned $589 million, or 33 cents a share. Revenue fell 41% to $1.85 billion.

The companies released the results after the stock market closed. Broadcom’s stock fell $3.90 a share to $28.07 on Nasdaq. AMD dropped 90 cents to $9.71 and Texas Instruments fell $1.58 to $29.91 on the New York Stock Exchange.

*

Bloomberg News and Associated Press were used in compiling this report.