UK chipset designer predicts larger losses

It blames industry fears as a number of possible customers fail to sign deals

Arc International, the UK chipset designer, brought more bad news to the technology sector on Friday when it warned that its losses for the second quarter of 2001 would be 50 percent worse than expected.

The announcement came only two days after Marconi shocked the stock market with a profits warning. Marconi's shares halved in value on Thursday, and many other high-tech shares also dropped sharply in value.

Arc told the market that it was expecting to make a loss of £6.5m for the second quarter of this year, compared to an earlier predicted loss of £4.4m. It blamed the widening losses on its failure to close a number of contracts. Bob Terwilliger, Arc's chief executive, told the Financial Times that potential customers were being scared away from signing deals because of uncertainty over their own markets.

The London stock market was down over 60 points in early trading. Analysts warned that recent profit warnings had put people off buying shares. Many companies fell to their lowest values for three months.

Shares in microchip designer ARM Holdings fell 9.9 percent to 196 pence, while software company Logica saw its shared drop 5.4 percent to 664 pence.

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