(Reuters) – Israel-based contract chipmaker Tower Semiconductor posted a decline in its fourth-quarter revenue on Wednesday, hurt by uncertainty in demand from the automotive sector.
Various chipmakers in their latest quarterly earnings have signaled the beginning of a supply glut in the automotive sector, that is likely to weigh on demand for companies such as Tower Semiconductor.
European chipmaker STMicroelectronics also forecast a more than 15% drop in its first-quarter revenue in January, due to softer automotive demand.
Tower Semiconductor, which makes analog and mixed-signal chips used mainly in automotives, reported revenue of $351.7 million for the three months ended Dec. 31, down more than 12% year-on-year.
The company will phase out certain lower margin products, it said without providing further details.
The company also said both its facilities in Hokuriku, Japan saw tools damage and some “work in progress” being hit as well as a halt in operations, in the aftermath of an earthquake on Jan. 1. Both factories have since returned to full operations, it added.
The company forecast its first-quarter revenue at $325 million, with an upward or downward range of 5%.
It posted adjusted profit of 55 cents per share for the fourth quarter. Four analysts polled by LSEG pegged earnings at 52 cents per share.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar)
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