MEMC executives said in a conference call to discuss first quarter financial results that semiconductor silicon wafer production utilisation rates had fallen below 30%. This was due to the rapid decline in demand from semiconductor companies. MEMC has a higher average exposure to semiconductor memory manufacturers, particularly in Taiwan, executives noted in the call. Taiwan DRAM producers have cut back production in the last six months as IC ASPs fell below manufacturing cost and several producers face major financial problems.
"Our first quarter results reflect a continuation of what has been an unprecedented reduction in demand in the semiconductor and solar industries," said Ahmad Chatila, MEMC's President and Chief Executive Officer in a statement. "The weak end demand for semiconductor and electronic products, as well as continued inventory reduction efforts by our customers, resulted in our semiconductor wafer factories running at abnormally low levels in the first quarter, creating a significant drag on our financial results."
However, MEMC executives noted that in March and through the first part of April, 2009 demand for wafers had improved by as much as 40%, though still 60% below 1H08 demand levels.
The company reported first quarter 2009 net sales of US$214.0 million, down 49.7% from fourth quarter 2008.
MEMC did not give revenue guidance for the second quarter, citing the difficult business conditions. Executives also noted that it was reviewing its capital expenditure plans for 2008 and beyond as well as previously announced plans to boost polysilicon production from the current 8,000MT per annum, reached at the end of 2008 to 15,000MT in 2010.