Fairchild Semiconductor International Inc. said Wednesday that a 13-week backlog, up 17 percent from the first quarter, may affect its ability to meet the previously predicted 5 percent sales growth in the second quarter.
The chip maker said that although backlog has grown from 5 to 30 percent in its display, television, white good, power supply, battery charger, and handset end markets in the first quarter, booking activity has kept pace, with strong distributor resales and extended lead times.
Kirk Pond, president and chief executive, said, "Our backlog margins have increased as a result of higher value new products, a greater mix of power products, lower costs, and better prices." Based on these factors, Fairchild said it sees improved views for third- and fourth-quarter earnings.
Fairchild said strategies for its power business in the last two quarters resulted in a 24 percent growth rate for its power segment, 40 percent more than its non-power products. The company expects power sales to climb 26 percent in 2004 compared to 2003. Fairchild said it will increase capacity at its eight-inch wafer plants in China and Pennsylvania, and sees four times the revenue from the China plant in the fourth-quarter of 2004 compared with a year ago.
The company said it cut costs by closing less efficient factories, supporting older technologies, and migrating more of the eight-inch wafer products to less-expensive models.