Despite the fact that GPS shipments are expected to have double-digit growth rates for at least the next 4 years, the world’s biggest GPS semiconductor company SiRF continues to take a beating. In the first quarter of 2008, SiRF lost all kinds of money, closed a couple of offices and announced they’d be downsizing their workforce. Investors obviously weren’t too happy and CEO at-the-time Michael Canning resigned. Things haven’t changed too much for the company though; if anything they’ve gotten worse.
Last Thursday, SiRF announced a net loss of $332.6 million for the second quarter ending June 30, 2008. While revenues were down about 10% compared to 2007’s second quarter, what’s really astounding is the difference in gross margins from year to year. In the 2nd quarter of 2007, SiRF still had a fairly healthy 53.9% gross margin. This year it’s dropped all the way to 21%. Unfortunately this means SiRF will have to downsize once again. Right now they’re sitting at 710 employees and they’re due to downsize another 7-9%. How much will that cost? Anywhere from $500, 000 to $1 million. Anyone think SiRF’s 3rd quarter earnings will be any better?