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Although not releasing full financial results until April 23rd MEMC has reported that its first quarter revenues will be approximately US$214 million, a 50% decline from the previous quarter. The company had guided a 50% fall at lasts quarter’s conference call. However, gross margins are expected to be approximately 9% of sales, compared to the company's previous outlook of declining to the 20% range.

In the last quarterly conference call with financial analysts, MEMC executives noted that sales from the higher priced semiconductor market were the primary cause of the hit on margins. Semiconductor fab utilisation rates and fab capacity has fallen in the first quarter, according to a report from Future Horizons.

The fall in gross margins could also be attributed to revised contract prices both in the semiconductor and photovoltaics markets as well as lower utilisation of polysilicon and wafer production at MEMC, pushing operating costs higher.

MEMC had claimed that it was retreating from the polysilicon spot market as prices declined rapidly and hoped supply and demand levels would start to improve. However, spot prices in the photovoltaics market have continued to fall rapidly, but still remain above US$120 per kg, at least double manufacturing cost levels for larger producers such as MEMC.