News Article
Inventory woes hit programmable logic sector
The short-term outlook for the programmable logic device market appears bleak after two of the sector's leading players admitted that they were unlikely to hit previously announced targets.
The decisions of California-based Altera and Xilinx to lower their financial expectations suggest that the inventory woes that have been afflicting the sector are not about to go away any time soon.
Altera blamed high inventory levels in the communications market and resultant weak demand for wireless and networking access products for its new fourth-quarter forecast of a sequential decline in sales by 9% to 12%. It had previously predicted a sales fall of 1% to 5%.
The company now expects to make sales of between $232.8 million and $240.8 million in the fourth quarter rather than $251.4 million and $262 million.
Altera also expects inventories to run to four months, from a previously estimated 3.3 months to 3.7 months. The only good news from the firm was that industrial sales were likely to exceed its earlier flat expectations.
Xilinx meanwhile is predicting that fiscal third-quarter sales will drop 5% to 8% sequentially, compared with a previously targeted decline of 2% to 6%, because of weaker-than-expected November sales.
The company now expects to achieve sales of between $370.8 million and $382.9 million. Its previous target range was $379.1 million to $395.2 million.
Xilinx also reported that its inventory leapt by 30% from 131 days ($142.8 million) in the July quarter to 156 days ($188.4 million) in the following quarter.
The company had predicted that it would remain at that level for the current quarter but has now revised the figure up to 170 days because of disappointing sales.
The decisions of California-based Altera and Xilinx to lower their financial expectations suggest that the inventory woes that have been afflicting the sector are not about to go away any time soon.
Altera blamed high inventory levels in the communications market and resultant weak demand for wireless and networking access products for its new fourth-quarter forecast of a sequential decline in sales by 9% to 12%. It had previously predicted a sales fall of 1% to 5%.
The company now expects to make sales of between $232.8 million and $240.8 million in the fourth quarter rather than $251.4 million and $262 million.
Altera also expects inventories to run to four months, from a previously estimated 3.3 months to 3.7 months. The only good news from the firm was that industrial sales were likely to exceed its earlier flat expectations.
Xilinx meanwhile is predicting that fiscal third-quarter sales will drop 5% to 8% sequentially, compared with a previously targeted decline of 2% to 6%, because of weaker-than-expected November sales.
The company now expects to achieve sales of between $370.8 million and $382.9 million. Its previous target range was $379.1 million to $395.2 million.
Xilinx also reported that its inventory leapt by 30% from 131 days ($142.8 million) in the July quarter to 156 days ($188.4 million) in the following quarter.
The company had predicted that it would remain at that level for the current quarter but has now revised the figure up to 170 days because of disappointing sales.
