SiliconBeat

Leadis Technology, the Sunnyvale supplier of analog and mixed-signal semiconductors used in portable and consumer electronics devices, slashed its sales forecast for its current quarter by more than half from its previous target of $5.2 million in revenue, to from $2-$2.5 million. The lowered outlook fell as a result of “customer order pushouts” on the company’s two largest display-driver products built into high-end smart phones, according to  chief executive Tony Alvarez in a statement.

The news won’t be music to two of Leadis’s largest investors, Dialectic Capital Managment and Kettle Hill Management, both New York based and both urging the company to sell one or more of its business units, reduce costs and buy back shares. Shares of Leadis have lost about 85 percent of their value so far this year. Kettle bought some in October for about 65 cents a share and some more in November at 46 cents a share. They closed Tuesday at 39 cents a share.

CEO Alvarez, as if reading their minds, assured that “expense management is critical in this environment, and we have taken steps to reduce costs,” without detailing any.

New of the revenue revision was released the same day Leadis announced reaching a settlement “in principle” to a shareholder lawsuit filed in April 2005 having to do with the company’s initial public offering in 2004.The plaintiffs accused Leadis officials of making “allegedly false and misleading statements in its prospectus. The proposed settlement includes $4.2 million payment to be made by the company’s liability insurer, while Leadis made no admission of guilt or liability in the matter.