TriQuint Semiconductor

(TQNT)

, a leading maker of communication chips, said writedowns could force a steeper-than-expected loss in the quarter under way. But it said fourth-quarter sales should be flat to up from current levels.

Investors, apparently taking a could-be-worse approach, bid the shares up 34 cents, or 8.8% in after-hours trading, to $4.20. Earlier in the day the stock lost 20 cents, or 4.9%, to close at $3.86.

The company said it may take a write-off of up to $12 million to cover impaired assets, on top of charges already outlined in late August. If it takes the additional charge, the total loss could reach 12 cents per share.

Excluding that write-off, however, TriQuint said it now expects to lose 5 cents to 6 cents per share as calculated according to generally accepted accounting principles, down from the 7-cent loss it projected last month.

The size of the loss was reduced because the company realized it would need to take a charge of $8 million to $9 million related to a recent acquisition from

IBM

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, instead of the $10 million it had projected in August.

Looking forward, TriQuint said it expects fourth-quarter revenue to be flat to slightly up from the third quarter, with earnings in the range of break-even to up a penny.

Meanwhile, there's been no change in the projection for third-quarter sales of $69 million to $74 million.

Wall Street expects the company to post sales at the lower end of that range, at $70 million, according to Thomson Financial/First Call. That would reflect a robust sequential revenue gain of 15%.

In one somewhat-promising sign for the wireless business, from which TriQuint expects to draw about 40% of its revenue in calendar year 2002, today

Qualcomm

(QCOM) - Get Report

slightly raised its projection for shipments of chips for the quarter ending in September. Qualcomm sells semiconductor technology based on the CDMA (code divsion multiple access) protocol used in wireless phones. TriQuint sells the rest of its componeints into the defense, broadband and optical networking end markets.

On the conference call, TriQuint CEO Ralph Quinsey characterized CDMA as an "area of strength" for his company. Products for CDMA-based systems, including filters for base stations and receivers and power amplifiers for wireless phones, accounted for 22% of TriQuint's revenue last year.

"CDMA being strong helps them," agreed analyst Satya Chillara of W.R. Hambrecht. "Qualcomm did indicate China was showing some growth. That should benefit TriQuint as well, since they have to supply components to the handsets."

TriQuint commands the biggest portion of market share for receivers used in handsets, while

Skyworks

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owns the majority of the transmitter market, he said.

But while the wireless business may be holding up, Chillara said, "At the end of the day, the way the guidance was given, it looks like

TriQuint's core business was flat."

TriQuint announced in August that it would lay off 7% of its workforce, due to a combination of weak demand and its adoption of a more efficient manufacturing process. On the conference call today, executives complained that the company was trading near cash value, but added that there are no plans to buy back stock.