LONDON (Alliance News) - Imagination Technologies PLC on Wednesday said its first half revenue will come in lower than previously expected and said it is not sure this will be made up in the second, even as it expressed a degree of confidence in its medium-term outlook.
The chipmaker said the semiconductor sector had a weak quarter to the end of June, though expectations are for an improvement in the second half of 2015. Part of this has been driven by a sharp slowdown in emerging markets growth in the period, particularly in China, Imagination said.
The combination of market softness and short-term timing gaps seen in chip replacement leads Imagination to expect its revenue for the first half to the end of October to be lower than previously forecast, which will likely mean it posts a loss for the period.
While the group does expect the second half to be stronger than previous guidance, due to the strength of its licensing pipeline and upcoming product launches by its partners, it said it is difficult to predict whether the second half will compensate for the first half shortfall.
Imagination said that given the strong licensing activities in the past couple of years and growing design wins in a number of markets, medium-term volumes should gain momentum, despite the short-term headwinds the industry faces.
"There are some indications of general softness across the semiconductor industry for the short-term. However, given the relevance of our technologies to the key markets and design-wins we have already secured and expect to secure, we remain confident of a growing momentum in our business in the medium-term," said Hossein Yassaie, Imagination's chief executive.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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