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To: Johnny Canuck who wrote (38005)	8/13/2002 1:12:44 PM
From: Johnny Canuck	Respond to of 69293

Chip Equipment Maker Applied Materials May Need to Cut Jobs -- 12:33 PM EDT Aug 13, 2002 (Austin American-Statesman - Knight Ridder/Tribune Business News via COMTEX) -- In May, Applied Materials Inc. officials said its orders for new chip-manufacturing equipment were strong enough to declare the long-awaited start of the chip industry's recovery. But three months later, on the eve of reporting the company's third-quarter results, some industry analysts are less optimistic about the largest maker of chip manufacturing equipment and the chip equipment industry. One analyst predicts layoffs will be announced when the company reports earnings today. Analyst Kevin Vassily with Thomas Weisel Partners in San Francisco expects new equipment orders to be down in the third quarter after expanding 51 percent in the second quarter. Vassily wrote this week that Applied suffered through a weak July that will affect growth in equipment orders. "We also believe that layoffs are being considered inside the company and are likely product-group-specific, as opposed to companywide," the analyst wrote. When Applied has layoffs, its Austin operation -- the company's major manufacturing center -- usually is affected. Applied had 2,600 workers in Austin in May after hiring back 300 of the workers that it laid off in December. That compares with 4,700 permanent and contract workers it employed in Austin at the end of 2000. The company is expected to bring in less than $5 billion in sales for the fiscal year that ends in October, compared with $7.34 billion in sales and $775 million profit in 2001. The company's peak sales was $9.56 billion in fiscal 2000. Applied had no comment on the analyst's forecast. Applied shares closed at $13.58 on Monday, down 28 cents. By Kirk Ladendorf To see more of the Austin American-Statesman, or to subscribe to the newspaper, go to austin360.com (c) 2002, Austin American-Statesman, Texas. Distributed by Knight Ridder/Tribune Business News.