Thailand Flood has Great Impact on ON Semiconductor

Published:2011/11/3 1:30:00 Author:Phyllis From:SeekIC

ON Semiconductor recently reported its third quarter sales. Compared to the second quarter, the number decreased 1 percent while increased 49 percent than the same quarter last year. In the report, it shows a net loss of 49.4 million dollars.

On a mix-adjusted basis, average selling prices for ON Semiconductor in the third quarter of 2011 were down approximately two percent when compared to the second quarter.

As for the fourth quarter, the company is expecting to see a sequential decline in revenue as a result of the impact caused by the flooding in Thailand and the inventory correction in the global electronics supply chain that is negatively impacting the semiconductor industry as a whole. The company said the flood in Thailand and the resulting damage to facilities located in Thailand will negatively impact revenues by about 60 million dollars in the fourth quarter.

Its SANYO Semiconductor division is expected to experience the vast majority of the revenue reduction specifically resulting from the Thailand flood. Given the fixed cost nature of the SANYO Semiconductor division, the reduction in revenue will be approximately 45 million dollars lower than the total net income for the company in the fourth quarter.

During 2011, the company has faced significant challenges resulting from two sizable natural disasters, specifically the tragic March earthquake and resulting tsunami in Japan and the recent devastating flooding in Thailand. Both of these natural disasters have sadly impacted the employees, their families and the operations.

The operations in Thailand are still suspended due to the severe flooding in the country. The company continues to work on options to meet customers’ production needs by shifting production to other facilities both within and outside global ON Semiconductor manufacturing network.

ON Semiconductor is a premier supplier of high performance silicon solutions for energy efficient electronics. The company’s broad portfolio of power and signal management, logic, discrete and custom services helps customers efficiently solve their design challenges in automotive, communications, computing, consumer, industrial, LED lighting, medical, military/aerospace and power applications. ON Semiconductor operates a world-class, value-added supply chain and a network of manufacturing facilities, sales offices and design centers in key markets throughout North America, Europe, and the Asia Pacific regions.

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