Silicon Storage Technology ( SSTI - Get Report) drastically lowered its first-quarter 2001 earnings and revenue projections Monday morning to nearly half of Wall Street's estimates. The company blamed the slumping economy and inventory corrections that lower demand for technology products.

For its first quarter ending March 2001, Silicon Storage said it expects earnings of 5 cents to 7 cents a share, while seven analysts surveyed by First Call/Thomson Financial were estimating the company, which is based in Sunnyvale, Calif., would earn 27 cents a share. In the year-ago period, Silicon Storage earned 11 cents a share.

Silicon Storage anticipates first-quarter revenue to be between $75 million and $85 million, nearly half of the $141.2 million five analysts expect, according to First Call/Thomson Financial. In the same period a year ago, the company posted revenue of $62.3 million. The company expects product gross margins to be approximately 35% due to softness in average selling prices of some of its products.

Silicon Storage supplies flash memory semiconductor devices for the digital consumer, networking, wireless communication and Internet computing markets.

Shares of Silicon Storage fell $1.25, or 11.9%, to $9.25 in recent Nasdaq trading.