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Applied Materials Chief Sees Rebound In Semiconductor Demand In 1999
SAN FRANCISCO -(Dow Jones)- Applied Materials Inc. Chief Executive
James C. Morgan said Thursday he sees supply and demand coming into
balance next year in the market for dynamic random-access memory, or
DRAM, chips.
Reaching this balance will push the industry to begin adding capacity
again, Morgan said at the BancAmerica Robertson Stephens Semiconductor
Conference here. For almost two years, the industry has had excess
capacity, and that has pushed up inventories and pushed down prices. The
effect on companies such as Applied Materials, a supplier of equipment
for making semiconductors, has been slower product orders.
Morgan said the expected business from DRAM companies will be one of
several dynamics to drive growth at equipment companies. Other drivers
will be stabilization in Asia and the expansion of the Internet, which
will increase the demand for chips over the next couple of years.
Meanwhile, the chief executive of Advanced Micro Devices Inc. (AMD)
gave an optimistic outlook for the rest of the year. William "Jerry"
Sanders told investors that he hopes to extend his company's
market-share gains against Intel Corp. (INTC). Intel and AMD are
aggressively cutting prices on chips, even as microprocessor clock
speeds rise. By consistently undercutting Intel's prices, AMD has made
market-share gains in the fast-growing sub-$1,000 PC category.
Sanders said preliminary market share numbers had AMD with almost 35%
of the desktop PC market in June, and almost half the market for
sub-$1,000 PC sales in that month.
Meanwhile, Rambus Inc. (RMBS) sees its technology capturing the Intel
personal-computer market over the next few years, said chief executive
Geoff Tate.
In 1999, Rambus's high-speed memory technology will be in high-end
PCs running Intel chips, Tate said. By 2001, all Intel chip sets will
use Rambus technology, which accelerates the speed data is transferred
between memory chips and processors, he said.
Some industry projections show Rambus technology having 50% share of
the DRAM market by 2001, up from 1% today, the company said.
Earlier this month, it was reported that global chip sales plummeted
12.7% in May as sales fell in all major markets due to the lingering
effects of the Asian financial crisis, according to a monthly report by
the Semiconductor Industry Association.
The report is consistent with the group's forecast of a 1.8% decrease
in total chip revenue by year's end. chips for some multiprocessor
applications by several weeks.
The No. 1 chip maker, Intel, has been battered by an unexpected
buildup of chip inventory at big PC makers, a slowdown in Asia and
renewed competition at the low end that is exacerbated by growing demand
for PCs that cost less than $1,000.
In another negative sign, retail unit sales of computers in May grew
just 0.7% from the year-earlier period, according to a survey of U.S.
stores by ZD Market Intelligence, a market-research firm in La Jolla,
Calif. |
