Programmable chip maker Xilinx Inc. (XLNX) on Wednesday raised its forecast for second-quarter sales, citing a significant increase in sales of Virtex-5 chips and broad based strength across nearly all end markets and geographies. The company also said it expects to ship the majority of the previous quarter's delinquencies in the second quarter. Shares of the company are up more than 6% in the regular trading session.
Xilinx, which designs logic chips that are programmed to perform specific chores in products, now forecasts sales for the second quarter to increase 10% sequentially. Earlier, the company had forecast sales for the quarter to be up 2%-6% sequentially.
The company had reported revenues of $376.2 million for the preceding first quarter in July. A 10% increase sequentially implies revenues of $413.82 million for the second quarter. On average, seventeen analysts polled by Thomson Reuters expect the company to report revenues of $391.61 million for the second quarter.
The San Jose, California-based company said it expects Virtex-5 sales to surpass 20% of total sales for the second quarter. The Virtex-5 line comprises of programmable chips for high-speed networking applications. The company's chips are used in network routers, cellphone base stations, cable modems and DVD routers. Approximately 40% of the company's business is generated from the communications market, while about 30% stems from the industrial segment.
Xilinx however maintained its outlook for gross margin for the second quarter of approximately 61% and operating expenses of about $175 million, including $5 million in restructuring charges. The company is slated to report its financial results for the second quarter on October 14.
In mid-July, Xilinx reported a 56% plunge in profit for the first quarter from the year-ago period, hurt by sales decline in all geographies and end markets. The company's net income for the quarter dropped to $38.0 million, or $0.14 per share, from $86.3 million, or $0.31 per share, in the same period a year ago. Sales for the quarter declined 23% to $376.2 million from $488.2 million in the year-ago period, impacted by supply constraints primarily relating to certain Virtex-5 devices in high demand.
The company had reported a double-digit decline in net revenue from all geographies, and by end market. Except for a 60% growth in revenue from new products, all other product revenues dropped by more than 25%.
Chip makers have suffered as the economic downturn dried up demand for personal computers, mobile phones and other electronics over the last year. However, the market is currently experiencing a slight improvement in demand. Several chip makers have recently raised their sales outlook, signaling a broad recovery in the chip business.
Last week, Xilinx's peer Actel Corp. (ACTL) raised its revenue outlook for the third quarter. The company now forecasts revenue for the quarter to be flat to up 3%, compared to its previous estimate of a decline between 2% and 4%.
Earlier in the month, another chipmaker, Altera Corp. (ALTR) said it expects sales for the third quarter to grow in the range of flat to 3% from the previous quarter, as compared to its previous guidance that indicated sales to decline 1% to 5% sequentially.
In August, the Semiconductor Industry Association, or SIA, reported that worldwide sales of semiconductors in July were $18.2 billion, up 5.3% from June 2009 when sales were $17.2 billion. SIA noted that the year-on-year rate of decline has moderated as the year progressed. The first six months of 2009 saw an average monthly year-on-year decline of approximately 25%, while July 2009 sales were 18.2% lower than July 2008.
SIA President George Scalise said at that time, "The fifth-consecutive month of sequential increases in semiconductor sales reflects improving demand in the consumer sector. Sales of consumer products such as netbook PCs and cell phones are supporting the modest recovery in demand that is now under way."
In Wednesday's regular trading session, XLNX is trading at $24.10, up $1.38 or 6.07% on a volume of 2.79 million shares. In the past 52 weeks, the stock has been trading in a range of $14.28-$24.28.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.