Semiconductor Firms Slash Forecasts - Reduce Headcounts, Reduce Capital Spending

Research firm Forrester slashed its growth forecast for U.S. technology spending in 2009 to 1.6 percent from 6.1 percent, saying the recession is deeper and will last longer than it assumed in previous forecasts.

Semiconductor Firms Slash Forecasts:

Several large chip makers, including Texas Instruments Inc. and National Semiconductor Inc., sharply cut their financial forecasts Monday, as the global economic slowdown saps demand for devices that use a variety of semiconductors.

- TI, which makes chips used in cellphones and high-definition televisions, warned sales in the current quarter would drop as much as 35% from a year ago.
- National Semi, whose chips are used in cellphones, computer displays and other products, posted a 63% decline in profit for the period ended Nov. 23 and said revenue could drop 30% in the current quarter.
- Broadcom, Altera warn of sales shortfall.
- Nokia, TI's top customer, issued two warnings in three weeks about phone demand. Nokia predicted that mobile-phone industry sales will decline 5 percent or more in 2009, the first contraction since 2001.
- Analog Devices warns of weak 1st-quarter sales, profit
- Chipmaker Intersil Corp cut its fourth-quarter estimate, expects a 37 percent to 41 percent fall in revenue.
- Samsung Electronics Co., the world’s largest maker of memory chips, liquid-crystal displays and televisions, said the global recession is wiping out profits at those businesses this quarter.
- Hynix Semiconductor Inc., the world’s second-largest computer-memory chipmaker, will probably post a record operating loss in the fourth quarter.
- Infineon Technologies AG, Europe’s second-biggest maker of chips, reported a seventh straight quarterly loss last week.

Join the layoff waves:

1. Dow Chemical to Slash 5000 jobs, shut down 20 plants
2. 3M to cut 2,300 jobs
3. Anheuser-Busch InBev to cut 1,400 jobs (6%)
4. Tribune Co, the privately held publisher of newspapers including the Los Angeles Times and the Chicago Tribune, filed for Chapter 11 bankruptcy protection.
5. Sony Corp to eliminate 16,000 jobs, include 8,000 full-time employees, or 5 percent of the company’s electronics workforce, and another 8,000 part-time and seasonal workers. Sony said it will invest 30 percent less in its electronics business than planned. The company will also cut the number of manufacturing sites by 10 percent by the end of next fiscal year, from 57 currently.
6. Chip equipment maker Novellus Systems Inc. said Tuesday that it will shrink its work force by 10 percent and cut its chief executive's pay in half as sales dry up
7. Texas Instrument will suspend its hiring process

From Calculated Risk: FedEx: "Significantly weaker macroeconomic conditions":

[S]ignificantly weaker macroeconomic conditions are expected to offset the benefits from lower fuel prices and the announced departure of DHL from the U.S. domestic package market.

Second quarter results benefited from rapidly declining fuel prices and continued cost management,” said Alan B. Graf, Jr., executive vice president and chief financial officer. “However, demand for our services weakened sequentially throughout the quarter and global economic trends continue to worsen, substantially reducing our second half outlook. We are adjusting our expense plans to more closely align with the weaker business conditions, and are now targeting capital spending of $2.5 billion for fiscal 2009, down from $3.0 billion at the start of the year.”