Flash memory maker warns of woes
Citing "dismal" economic conditions, Silicon Storage Technology warns it will miss revenue and earnings estimates for the quarter.
The stock closed down $1.19, or 11 percent, at $9.31.
SST makes flash memory used in devices such as cell phones, digital cameras and MP3 players. It also licenses its SuperFlash technology to chipmakers.
SST missed estimates for its fourth quarter and warned investors that 2001 would not be pretty.
The flash memory market has been suffering along with the rest of the tech world, as demand for products--in this case, mobile phones--dries up.
"Market conditions have not improved during the quarter, and customers have continued to return products, cancel backlog, or push out shipments. The result for SST is extremely limited visibility for the near term," the company said in a release.
SST cut first-quarter revenue estimates to between $75 million and $85 million. Average selling prices are also declining, pushing down gross margins to around 35 percent.
As a result, revenue per share is expected to be 5 cents to 10 cents. That is far lower than the 27 cents expected by a consensus of analysts, according to First Call.
CEO Bing Yeh noted that "in spite of the current dismal economic conditions, we are confident of SST's long-term ability to continue to grow and expand market share."
In particular, he said, the company is investing in several high-density application-specific memory products and pushing toward 0.25 and 0.18 micron production.