SAN FRANCISCO -- Applied Materials Inc.
Chief Executive James C. Morgan said
Thursday that 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, Mr. 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.
Mr. Morgan said the expected business from
DRAM companies will be one of several
dynamics driving 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.
C. Scott Kulicke, chairman and chief executive
of Kulicke & Soffa Industries Inc., said the
semiconductor-equipment industry's rebound
will be slow.
"We believe this is the bottom," Mr. Kulicke
said. "It couldn't get much worse. But the
recovery will be slow ... [and] it will be a tough
period in the meantime." Kulicke & Soffa, a
maker of semiconductor-assembly equipment,
won't see any significant upturn in orders for a
year, he said.
Earlier this month, the Semiconductor Industry
Association 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.
The report is consistent with the group's
forecast of a 1.8% decrease in total chip
revenue by year's end. |
