National Semiconductor Corp has rounded off its financial year with a huge $212m loss for the fourth quarter, taking the giant Santa Clara based chip maker into losses for the full year, with signs that there is more trouble to come. Revenues for the fourth quarter fell by 24% to $510m, while the $212m loss […]
National Semiconductor Corp has rounded off its financial year with a huge $212m loss for the fourth quarter, taking the giant Santa Clara based chip maker into losses for the full year, with signs that there is more trouble to come. Revenues for the fourth quarter fell by 24% to $510m, while the $212m loss includes two huge charges, one for restructuring the company’s workforce and the other for purchased R&D. NatSemi is sticking to the old adage that if you have to take a bath, then you may as well make it a big one. Because even without these charges the company made a $97m operating loss, nearly one fifth of its total sales for the quarter. Falling revenues from a depressed semiconductor market and sluggish demand brought on by an over-full PC inventory channel have weighed heavily on the big Californian company, which warned of this impending disaster back in March. It subsequently announced its plans to lay off 1,400 of its 13,000 workforce in May. And so the fourth quarter includes $63.8m of proposed restructuring and severance costs to align NatSemi’s production capacity with reduced demand. $32m is earmarked for severance payments while $21m is the write-down of assets and development work on what CEO Brian Halla called marginal product development programs. A further $95m is to be written off the purchased assets of ComCore Semiconductor, a privately held maker of networking and communications chips which NatSemi acquired in April. But this merely represents the now standard bookkeeping dodge for acquisition accounting. More importantly, fourth quarter order levels were down both year on year and quarter on quarter, with no firm view from NatSemi on the when the firm will turn things around. Current weekly order rates suggest that the market decline may be bottoming out, but visibility is limited, was all that Halla could muster as a rallying cry for his no- doubt grief stricken shareholders. The shares have fallen from over $40 last year to just $15.38 at close on Thursday, prior to these results being released. In terms of slack demand, the North American market was the worst hit, followed by Asia and Europe, the company said. Although the wireless semiconductor market was a ray of sunshine in the curtain of gloom, showing double digit growth.