By Jerry A. DiColo Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Applied Materials Inc. (AMAT) Chief Executive Mike Splinter warned of an extended downturn affecting the semiconductor equipment sector, with customers pulling back on spending for the tools used to make chips.
"The global economy will have an impact on all of Applied Materials' businesses," Splinter said in a conference call with analysts to discuss earnings.
During the call, Applied Materials said it expects fiscal 2009 first-quarter earnings of zero cents to four cents a share on a 25% to 35% decline in revenue. The company also sees overall orders dropping 30%.
Applied Materials shares fell 2.5% to $9.70 in after-hours trading, as Intel Inc. (INTC), the world's largest chip maker, cut its fourth-quarter guidance and Applied Materials provided a worrisome picture of the current market for toolmakers.
The outlook mirrors views provided by smaller equipment makers over the past few weeks amid growing chip inventories and production cuts as chip makers and product manufacturers brace for a recession.
In its small but fast-growing solar equipment business, Splinter said he is expecting a customer pullback in spending and a reassessment of the demand environment through the first half of 2009.
The company said revenue from its solar unit will likely fall 25% in the first quarter of 2009.
Additionally, Splinter said there will be "significant changes" in Applied Materials' customer base in its semiconductor equipment segment. Memory chips, which represent roughly 50% of the overall semiconductor equipment market, have been suffering from massive price drops through a continued oversupply of the widely used chips.
Among makers of DRAM memory chips, "We see two fewer, maybe three fewer companies in this space by the end of this downturn," said Splinter. "If there are fewer suppliers, the market will be more orderly, and I think in the long run that will be more positive."
- Jerry A. DiColo; Dow Jones Newswires; 201-938-2007; jerry.dicolo@dowjones.com
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(END) Dow Jones Newswires
November 12, 2008 17:48 ET (22:48 GMT)

Publié le 12 novembre 2008 Copyright © 2008 Dowjones