Silicon Storage Slides on Q1 Outlook

Silicon Storage Technology (Nasdaq: SSTI) fellUS$1.38 to $9.13 Monday morning after the maker of semiconductor parts said that revenue, gross margin and per-share results for the quarter ending thismonth will be “significantly lower than previously expected.”

Like other companies in its industry, Sunnyvale, California-based SST blamed”the deteriorating economy and inventory corrections that are continuing toconstrain demand for technology products.”

First-quarter revenue will likely total $75 million to $85 million, withearnings of 5 to 10 cents per share. Analysts had reportedly expectedearnings of 27 cents per share and revenue of about $141 million. A yearearlier, the company earned 11 cents per share on revenue of $62.3 million.

SST said a “sharp downturn” that began late last year is continuing, andcustomers have been steadily returning products, canceling orders or delaying shipments. Inaddition, lower selling prices are putting pressure on margins.

“The resultto SST is extremely limited visibility for the near term,” the company said.

President and chief executive officer Bing Yeh said the company iscontinuing to develop new products, cut costs of producing others, andexpand its licensing relationships.

“In spite of the current dismal economicconditions, we are confident of SST’s long-term ability to continue to growand expand market share,” said Yeh.

SST makes memory chips using its patented SuperFlash technology. Partners andlicensees include IBM, National Semiconductor, Motorola, Samsung and SeikoEpson.

SST reported fourth-quarter revenue of $161 million, down from $163.7million in the year-earlier quarter. Net income totaled $37.3 million, or 39cents per share.

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