following is today's CNBC transcript with captain morgan. for those who prefer multimedia, you can get the aud & vid replays here:
mktnews.nasdaq.com\\www\nasdaq\news\msnbc\1999\5\19\NASDAQ_0910_21415.htm&usymbol=AMAT&logo=True&companyname=Applied+Materials%2C+Inc%2E
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CNBC - SQUAWK BOX
INTERVIEW WITH APPLIED MATERIALS (AMAT) CHAIRMAN AND CEO JAMES MORGAN
MAY 19, 1999
SUMMARY: Morgan says improvement in Asia, especially Taiwan, has really helped the company. He comments on the transition to copper.
The world's biggest maker of semiconductor equipment reported second-quarter earnings 36 cents a share.
Expectations were 27. The new orders number came at $1.4 billion, an increase of 35% from the first quarter. Shares soared, as we said, up 4 and change in pre-market trading. Joining us now take a look at the business, James Morgan, Chairman and CEO at Applied Materials. Mr. Morgan, good to see you again.
Good morning, Mark.
Mark: The numbers much stronger than Wall Street anticipated. Is that Asia coming back to life? Give us a feel for how things look regionally.
All right. Well, I think the main reason is that the team at Applied Worldwide did a great job this quarter. And the products that we've introduced over the past couple years are the products of choice around the world. And we're also seeing Asia begin to pick up again and, of course, you know we have about half our business there.
Mark: Specifically within Asia, are you seeing -- where are you seeing the strength? Taiwan, Korea, Japan, where?
Right. There's been an improvement everywhere, but Taiwan was clearly the strongest as the founders begin to invest in new leading technology.
Richard Hoey: Yeah, the portfolio manager at Dreyfus Technology Fund has kind of pushed Applied Materials internally as kind of a best to breed technology company. And he keeps talking about the .18 product cycle and how Applied Materials has a very strong pointing in that. I've got two questions. One is what is it? And second of all, how are you positioned to take advantage of that?
Well, in order to make these new advance chips, clearly they need to have the capability to make smaller lines to make the circuits more precise. And as a result of that that they're moving to the next generation of technology, which means narrower line widths. And as a result of that, fortunately we have a full set of products in that technology. And that's why the customers are moving to us.
Mark: How about the transition to copper, where does that stand?
That's in just the very early stages. As you probably noticed last month, we introduced two more new products specifically geared towards copper. And so, that will fill out our product suite for copper. We'll have the broadest set of products for copper applications in the world.
Mark: Do you separate out, in any way, and therefore, can you give us any feel for which of your customers are doing better than others? And I'm thinking in broad terms, memory versus, say, people you know who specialize in DSPs, things of that nature.
Right. Well, the memory makers have had pricing issues the last month or so, but usually this time of year there is a fair amount of uncertainty in the memory market. And it begins to strengthen as the year goes on and is much stronger in the fall. They also are moving to a technology -- the next technology node. And, therefore, we see that as a major investment requirement next year.
Mark: I'd like to get your reaction to a report that A.T. Kearny, the management consulting firm issued yesterday or last night to the effect, they said that a lack of qualified workers is costing silicon valley billions of dollars annually and threatening its position as a global high technology center. And it goes on about the unfilled high-tech jobs nationwide and how this is crimping, cramping, perhaps even crippling Silicon Valley. Are -- is that something that you have and see in your business?
Well, fortunately, as the leading company in the world in this field, Applied is really a place where most people would like to work. So, we've had the ability to attract outstanding people from all over the world and in Silicon Valley. I think the education issue in the United States is probably the biggest challenge that we have as far as trying to prepare our workforce to meet the information age requirements.
Mark: You've got a problem in California, don't you?
Yeah, we do, yes, but fortunately because of our attracting this as a company, it hasn't been a serious problem yet for us.
Mark: But you have and see it in other companies?
Oh, sure. There's a difficulty in finding really good people.
Mark: Mr. Morgan, thank you very much, as usual for giving us your view of how things are.
Good, thanks, Mark.
Mark: Appreciate it. James Morgan, Chairman and CEO at Applied Materials. He joined us from Stanford University in California. |
