Crisis pushes TEL's orders to 7-year low
Reuters
(01/09/2009 2:43 AM EST)
URL: eetimes.com
TOKYO, Jan 9 -- Japan's Tokyo Electron Ltd. said on Friday that orders for its tools to make chips and flat panel displays dropped a quarterly 65 percent in October-December to a seven-year low, as TV and PC chip makers freeze spending on new equipment.
Consumers remain unmoved by cut-throat prices, and the financial crisis increasingly translates into mounting debt and rising inventory, hurting equipment makers.
Orders at Tokyo Electron, the world's No.2 supplier of machines used to make semiconductors after Applied Materials Inc, totalled about 37.5 billion yen ($411 million) in October-December.
That's down 74 percent from the previous year and the lowest since 2001, following the bursting of the IT bubble.
"Demand has not recovered in January," said spokesman Ken Sasakawa. "Visibility is low, and at this time, we can't say how long orders will continue crawling at this pace."
Orders for Tokyo Electron's tools used to make semiconductors slipped a quarterly 55 percent to 37 billion yen, while orders for gear used to make flat panel displays and solar panels plunged 98 percent to 500 million yen.
Chip makers ranging from South Korea's Hynix Semiconductor to Japan's Toshiba Corp and Taiwan's ProMOS Technologies Inc are cutting output, not expanding, while liquid crystal display makers are also reining in investment.
Their suppliers have long waited for logic chip makers such as Intel and Advanced Micro Devices Inc to order more of the machines used to coat, etch and heat silicon wafers before they are cut into chips.
But such hopes were squashed this weak after Intel, the world's biggest maker of central processing units that control PCs, cut its fourth-quarter revenue forecast for the second time earlier this week amid the worldwide slowdown.
Ahead of the announcement, shares of Tokyo Electron closed down 0.6 percent at 3,330 yen, while the benchmark Nikkei average fell 0.5 percent. (Reporting by Mayumi Negishi; Editing by Chris Gallagher)
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