Hi OJ you have probably seen this, but figured I would throw it in for you.
kiwi
News Alert from Investors Business Daily via Quote.com
Topic: Applied Matls Inc
Quote.com News Item #4811677
Headline: Computers & Technology Applied Assumes Chipper Outlook For Year In
Gear
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After a dismal '96, chip equipment makers hope improved business
this year has set the stage for a strong '98.
Demand for new technology is helping companies shake off last
year's downturn, says James Morgan, chairman and chief executive of
Santa Clara, Calif.-based Applied Materials Inc.
Applied reported a record fourth quarter, ended Oct. 26, with
sales of $1.28 billion. That's up 48.7% from $861 million for the
year-ago quarter. The company reported net income of 47 cents a
share, up 74% from 27 cents.
Chipmakers now are looking to Applied and others to squeeze out
more chips from a silicon wafer. They also want to shrink features
such as transistors on the chips. Line widths already are down to
.25 micron - a human hair is 100 microns wide - and they are getting
thinner.
Morgan recently discussed with IBD where his business is coming
from as well as new technology that's helping to drive orders.
IBD:
How did you pull out of the downturn?
Morgan:
In '96 and '97, we capitalized on a long-term strategy we've had,
which is to build up our strategic technical ability and broaden that
to increase our market leadership. During the downturn, we
prioritized things for the long term, like .25-micron capabilities in
a broad-product-set family.
IBD:
What's selling?
Morgan:
As we came into '97, the customers have been taking our (.25
micron) products into their (test) lines. So they're beginning to
increase in production in the latter part of the year and into '98.
For example, 40% of the new orders in the fourth quarter were for
.25-micron capability and below. That means as it becomes a higher
proportion of our sales, that should bode well for our increased
market share as well as the growth for '98.
IBD:
How have economic troubles in Asia affected chip equipment sales?
Morgan:
We announced three orders (on Nov. 20). One for Taiwan
Semiconductor Manufacturing for $100 million. Korea's Hyundai
(Electronics Ind. Co.) is strategically investing, particularly in
Europe, for their expansion in the future. (Hyundai signed a $35
million contract.) Anam Industrial Ltd. (in Korea) is expanding
(digital signal processing) capability (with a $52 million order) in
their joint venture with Texas Instruments Inc. Those are things that
we expect will continue.
IBD:
Looking ahead to '98 growth, where do you expect to see advances?
Morgan:
I think it comes from the adaptation of some newer technologies
like thermal processes, which is a new area for us. Chemical
mechanical polishing is a brand-new business for us. It's getting to
where the CMP business is going to be helpful this coming year (to
the bottom line).
IBD:
What is CMP?
Morgan:
Chemical mechanical polishing is an emerging high-volume
technology. It's gone from a start-up a year ago to a couple hundred
million dollars or more next year. You use a slurry (solution) and
you polish (the silicon wafer). It smoothes out the wafer so when
you get ready to project (the transistor pattern on to it), you don't
get distortions. You can get down to smaller line widths.
IBD:
When will we know if '98 will be a strong year?
Morgan:
Because of the downturn in the middle of last year, customers
hesitated to purchase. So they've been pretty conservative since
then. Particularly since DRAM (memory) prices have continued to be
weak . . . . I'd look at bookings for indications of the revenue a
couple quarters out. |
