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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: matt dillabough who wrote (31432)	7/13/1999 11:30:00 PM
From: A. Edwards	Respond to of 70976

Applied Materials Sees Chipmaker Recovery: Bloomberg Forum July 13 (Bloomberg) -- Applied Materials Inc. expects to benefit because of scarce manufacturing capacity by top chipmakers only two years after a glut created industry-wide losses, Chairman and Chief Executive James C. Morgan said. ''Our customers are forced to order because of a shortage of near-term capacity,'' he said. That's good for Applied Materials, the world's biggest maker of chipmaking equipment. ''This may give our industry better momentum over a period of time,'' Morgan told the Bloomberg Forum by satellite from San Francisco's Semicon West, the chipmaking industry's biggest annual trade show. For Applied Materials' third fiscal quarter ending Aug. 31, he said without giving specifics, that means new orders will exceed sales, as they did in the second quarter, when orders rose 35 percent to a record $1.39 billion from a year earlier, while revenue fell 5 percent to $1.12 billion. ''There's a lot of opportunities for us if we do a good job,'' said Morgan, 61, who's been CEO of the Santa Clara, California-based company since 1977 and chairman since 1987. Applied Materials, which has about a 20 percent share of the $20 billion global market for semiconductor manufacturing equipment, benefits because of its comprehensive product line geared for making smaller chips on bigger wafers, and expanding into new materials such as copper. Morgan said advances, such as making chips on copper instead of the usual silicon, will take time to become industry standards. While customers like International Business Machines Corp., the No. 1 technology company, have announced they're making copper chips, most others ''are just in the development phase'' and haven't placed big orders. Novellus Systems Inc., which had 1998 revenue about 10 percent of Applied Materials' $4.04 billion, is its major rival in copper, ''but much smaller and doesn't have the same product line we have,'' Morgan said. Applied Materials also expects to benefit from the limited credit available in economically troubled Asia, the base of more than half its customers. Those chipmakers don't have the same low finance costs of Western rivals. ''If you don't pay, you don't play,'' Morgan said. Management is open to acquire ''selective technologies'' using some of its $2 billion in cash and short-term investments, the chairman said. Divisions are free to pinpoint acquisitions, although none are in the works, he said.