Connector chip maker Silicon Image said its chief executive resigned and the company’s third quarter revenues are going to be considerably lower than expected.
Steve Tirado, the former chief executive, will be replaced by Hal Covert, who was previously chief financial officer of the Sunnyvale, Calif.-based company. Covert will now be president and chief operating officer and the company will conduct a search for a permanent CEO.
Silicon Image helps make high-definition video gadgets possible because it makes the chips for high-definition multimedia interface (HDMI) cables, which connect gadgets that need to transfer video at high speeds. Most new TV sets use HDMI connectors, and Silicon Image is the big supplier in the market. Silicon Image is also an important player in the setting of new standards for transferring video at high speeds through homes. Lots of new products are dependent on continuous advances in video transfer speeds.
Previously, the company expected revenue of $44 million to $46 million; now it expects $37 million to $39 million in the third quarter. The report shows that technology companies are not out of the woods yet, particularly as customers shift toward different kinds of technology products.
“We are disappointed to report this revised revenue outlook,” said Covert in a statement. “During the third quarter of 2009 we continued to experience the impact of the product transition the company has been undergoing since 2008, in particular its effect on legacy products’ declining average selling prices. This factor, combined with our customers’ shift in production from high-end products to mid-range and low-end products, has put more pressure than anticipated on Silicon Image’s goal of improving revenue generation.”