China earthquake blamed for reduced cellphone demand

LONDON — Memsic Inc. (Andover, Mass.), a CMOS MEMS accelerometer vendor with products based on a proprietary thermal technology, has cut its guidance for second quarter revenue by more than 20 percent due to weakness in the mobile phone market following the recent earthquake in China.

Memsic said that for the second quarter of 2008, the company now expects revenue in the range of $5.5 to $5.6 million, compared to a prior expectation of revenue between $7.0 and $7.3 million.

"The lower anticipated revenue reflects reduced demand for products in the mobile handset segment arising after the recent earthquake in China and increased pricing pressure," Memsic said.

"I am thankful that we did not experience any interruption of our operations as a result of the recent earthquake in central China," said Yang Zhao, Chief Executive Officer of Memsic, in a statement. "While sales in our automotive and industrial product segments are on track, in the mobile phone segment in China, we are seeing a combination of weaker demand, as attention in China turns toward earthquake relief and rebuilding, and consumer attention turns to saving for emergencies, and lower average selling prices due to continued competitive pressures."

Zhao continued by saying: "Our longer term outlook remains positive. New product initiatives underway that broaden our market reach give us additional confidence."

Additionally, Memsic reported that Shang Hsiao has resigned from his position as chief financial officer of the company, effective June 16, 2008, to pursue personal interests. Patricia Niu, vice president of finance, has been named interim CFO while the company conducts an executive search for a new CFO.

Memsic, previously included within the EE Times Silicon 60, conducted an initial product offering of shares in December 2007. Its accelerometer products are used in a variety of applications such as mobile phones, automotive safety systems and video projectors. Memsic combines proprietary thermal-based MEMS technology and advanced analog mixed-signal processing circuitry design into a single chip using a standard CMOS process.

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