No revival yet for chip makers' fortunes

National Semiconductor (NatSemi) and LSI Logic have announced profits warnings, shortly after Analog Devices, a Massachusetts-based maker of digital signal processors (DSPs) and other semiconductors, reported an 80 per cent decline in quarterly profits.

NatSemi said losses for both its next two quarters will exceed those for the most recently reported period - Q4 of last year - when the company lost $69.3m, or 42 cents per share.

The company blamed "weakness in overall semiconductor demand, including the personal computer market", where its Cyrix subsidiary is up against the might of Intel.

LSI Logic said it too will fail to meet analysts' forecasts. Shares in the company fell 13 per cent yesterday after LSI announced profits and revenues are likely to fall by five to ten per cent instead of remaining flat, as previously indicated.

Investor confidence in most chips companies was also rocked by Analog's third quarter results, which showed profits plunging to $8.8m from $46m a year ago. Revenues were down seven per cent at $295m.

Paradoxically, the company reported growth in its DSP business, even though demand for DSPs to be used in GSM phones in Asia was weak.