Xilinx Inc. has provided an upbeat update to its sales guidance for its fiscal Q2 2010, ending this month. The programmable logic vendor said September quarter sales are expected to be up approximately 10 percent sequentially. Xilinx previously gave a sales guidance of up approximately 2 percent to 6 percent sequentially. The company said the increased sales guidance is primarily due to broad-based strength across nearly all end markets and geographies. Additionally, Xilinx said it expects to ship the majority of last quarter's delinquencies in the September quarter.
Gross margin guidance of approximately 61 percent and operating expense guidance of approximately $175 million, including $5 million in restructuring charges, remain unchanged.
"We believe that PLD leader Xilinx has continued to see improved trends to date in its September quarter with a solid outlook developing for December orders," Tim Luke, a semiconductor market analyst at Barclays Capital, said in a research note this morning.
Xilinx also said that its Virtex-5 sales are expected to increase significantly in the September quarter, surpassing 20 percent of total sales. The company in July lowered its fiscal Q1 outlook "due to supply constraints on certain Virtex-5 devices," which Xilinx said were in high demand. Although Xilinx did not explain further in its July press statement, reports later attributed the supply constraints to tight capacity with foundry partner UMC, not yield issues.
"We believe while some capacity issues may linger on leading V5 platform at foundry partner UMC into December quarter that Xilinx remains on track to surpass 20 percent of sales in September," Luke said.
Looking to the December quarter, Luke said orders suggest revenues at least flattish to up slightly. Luke continued to state that while his firm believes orders for China 3G may move flattish to lower in the December quarter, it sees ongoing improvement at core networking, industrial, military, automotive, and consumer accounts into the December quarter for Xilinx.
Xilinx is slated to report on its fiscal Q2 on October 14.
Intel, Rambus, and Texas Instruments have all also raised September quarter estimates as signs of an improving economic climate for the electronics industry continue to emerge.
Xilinx
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