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To: patron_anejo_por_favor who wrote (84808)	3/23/2001 4:16:48 PM
From: Roads End	Respond to of 436258

Geez they are already getting a 75% discount on their power bill. Sure hope they don't find out about this higher up the food chain. -g- Applied asks for and gets 30% cost cuts from suppliers in downturn By J. Robert Lineback Semiconductor Business News (03/23/01 09:59 a.m. PST) NEW YORK -- To pare down costs in the current downturn, Applied Materials Inc. has asked all suppliers to cut prices for services, components, and subsystems by at least 30%, said Joseph Bronson, chief financial officer at the semiconductor capital equipment company. "We are looking at every contract and going back to the suppliers of those contracts, asking for at least 30% off," Bronson told attendees of this week's SEMInvest conference in New York. "Amazingly, we are getting a lot of acceptance," he told Wall Street analysts at the meeting, which was sponsored by the Semiconductor Equipment and Materials International (SEMI) trade group. Applied, the world's largest chip equipment supplier, carries a tremendous amount of weight with dozens of subsystem suppliers and contractors that are now feeling the pinch of the industry's downturn. Many of the suppliers are accepting the 30% cut in prices in order to keep Applied's business, hinted the CFO, who was fielding questions at the SEMInvest conference during a panel discussion. Bronson and top executives from KLA-Tencor Inc. and Teradyne Inc. said there were no signs of improvement yet in the industry's capital equipment slump, which began late last year (see March 21 story). The Applied Materials executive vice president told the SEMInvest audience that his company began to see some evidence of a slowdown in the second half of 2000, and it began to implement "controlled hiring" in operations in October. Applied's fears of a downturn turned out to be correct, but the industry's 2001 recession has become "worse than expected," Bronson said. Applied has reported that orders have dropped 40% from the fall, and "we still haven't seen a bottom yet," Bronson noted. However, one business segment is picking up--services associated with equipment in the field. That business is up 25% quarter-to-quarter as chip makers look for ways to control their own costs, he said.