Fairchild Semiconductor

warned that "backlog volatility" could affect its ability to hit second-quarter forecasts, although it still expects sales to rise 5% over first-quarter levels.

Analysts expect the company to earn 23 cents a share on revenue of $420.3 million in the quarter.

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"Demand for our products continues to be extremely strong and broad based," Fairchild said. "We also continue to see volatility in our second-quarter backlog, which could affect our ability to meet our forecast. However, booking activity has been consistently high all quarter, with particular strength in the display, television, white good, power supply, battery charger and handset end markets."

Among those end markets, Fairchild said, backlog has risen to 30% from 5% since the start of the quarter, with backlog margins rising as a result of good product mix, lower costs and better prices.

"Distributor re-sales have been strong, driving their weeks-supply-on-hand down slightly from the start of this quarter," the company said. "We continue to grow total backlog to record levels, while lead times steadily extend, allowing us excellent visibility into the third quarter as well as an improving view into the fourth quarter."

The company is in the midst of a strategy shift under which it is trying to emphasize higher-margin chips used in power applications. In its release, Fairchild said the power line has grown 24% over the last two quarters, 40% faster than non-power products, and the company expects the segment's sales to rise 26% over 2003.