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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (2985)	9/12/2002 7:50:41 AM
From: Road Walker	Respond to of 25522

Philips cuts chip sales outlook, shares plunge Thursday September 12, 7:43 am ET By Christopher Borowski and Lucas van Grinsven (Adds fund manager comments, peers) AMSTERDAM, Sept 12 (Reuters) - Dutch Philips Electronics (Amsterdam:PHG.AS - News) sharply cut its chip sales forecast for the third quarter on Thursday, providing a fresh signal that the long-awaited recovery of the sector was still far off. ADVERTISEMENT The news weighed heavily on Philips' stock, which dropped 8.7 percent by 1043 GMT, making it Europe's biggest blue chip loser. Shares in its larger European rivals STMicroelectronics (Paris:STM.PA - News) and Infineon (XETRA:IFXGn.DE - News) also suffered, falling 4.5 and 7.4 percent respectively. Philips, Europe's largest consumer electronics group, warned it expected third-quarter sales at its key semiconductor unit to fall 13 to 15 percent compared with the previous quarter. Just two months ago it expected a sequential sales decline of between zero and five percent. "We see general softness in the entire semiconductor industry but particularly in commodity products. Customers are delaying their orders," Scott McGregor, the head of Philips's chip unit, told analysts. The chip sector, which had suffered its worst ever year in 2001, had been hoping for business to grow in the second half of this year, but stalled economic recovery and lingering difficulties among key clients such as personal computer and telecoms equipment makers continued to haunt the industry. "The recovery in the chip sector has definitely stalled. PC demand and seasonal demand for back-to-school hasn't materialised. The newsflow from the sector has deteriorated quite remarkably," said fund manager Simon Kirton at Aberdeen Asset Managment in London. Investors, some of whom were braced for a warning, were nevertheless surprised by how bad the news was. "Today's news indeed comes as a disappointment," saidfund manager Daniel Kerbach at Activest in Munich. Clients such as cellphone maker Nokia (NOK1V.HE) must be "exerting enormous pressure on prices", he said. McGregor said that the decline of the dollar also worsened the sales drop in euro terms, and that the third-quarter decline in dollar terms would be between four and six percent. Earlier this month sector leader Intel (NasdaqNM:INTC - News) also tightened its third-quarter revenue guidance. In August TSMC (Taiwan:2330.TW - News), the world's largest contract chip maker in which Philips holds a significant stake, reported its first sales drop in five months. SILICON LINING Philips, Europe's number three producer of semiconductors used mainly for consumer electronics, did say it expects its semiconductor division to rebound in the final three months of the year, seeing an increase of between seven and 12 percent compared with the third quarter. "We expect this (rebound) partly because it is seasonal and we're also gaining traction with some of our customers," McGregor said. But the lower third-quarter sales forecast forced Philips to reduce its cost base and adjust its break-even level. The company will take a restructuring charge of 200-225 million euros for its semiconductor unit in the next six months. Also, capital expenditure on factories and equipment at the chip unit will be just 450 million euros in 2002 compared with 981 million in 2001. Research and development spending at the chip unit will be 1.15 billion euros in 2002, compared with 1.26 billion last year, Philips said. Philips, also said that capacity utilisation at its semiconductor unit was falling in the third quarter from levels of over 50 percent in the second quarter. The company has previously said it would break-even with capacity utilisation of around 60 percent. "We said in the second quarter that capacity utilisation was over 50 percent. It is softening a bit," said McGregor. (Additional reporting by Patrick McLoughlin in Stockholm and Hannfried von Hindenburg in Frankfurt).

To: Gottfried who wrote (2985)	9/12/2002 8:21:18 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

ASML stands by H2 2002 delivery f'cast Thursday September 12, 5:41 am ET (Adds share reaction, trader comment, background) AMSTERDAM, Sept 12 (Reuters) - Dutch chip equipment maker ASML Holding NV on Thursday stood by forecasts to deliver 100 machines in the second half although key client TSMC (Taiwan:2330.TW - News) said it would delay installing some equipment and machinery. "We are not changing our guidance for the second half of the year," Rob van Vliet of ASML's investor relations department told Reuters. In July, ASML said it had orders for 160 machines and would ship 100 by year end. "We do see some changes in our order book. Some clients are asking us to delay shipments but others are asking us to make shipments earlier and that is why we can maintain our forecast," Van Vliet said. Taiwan's TSMC on Wednesday halved forecasts for its production of 12-inch wafers this year and said it would postpone installing new equipment and machinery into its second 12-inch plant by three to six months. The news weighed heavily on ASML shares right from the open and they briefly ticked higher after ASML confirmed its targets for the second half. However, Philips Electronics also on Thursday cut its forecast for third-quarter chip sales, and said its capital expenditure at that unit would halve in 2002 from last year's levels. By 0915 GMT ASML was down 6.37 percent at 18.35 euros, marginally above an intraday low of 18.11 euros, with traders saying investors remained sceptical. "They are doing their best to be bullish but everyone knows that the environment in this sector is very tough and a lot of people fear that even if ASML is not revising their guidance today then they are going to have to later," one trader said. "The bearish news coming out of Philips today is certainly not helping either. Everything related to the chip sector looks a little more precarious today than just a day ago." ASML, which last week confirmed that its inflow of new orders was slowing, is the world's second-largest maker of scanners and steppers -- machines that map out semiconductor circuitry on silicon wafers. It ranks behind Japan's Nikon Corp (Tokyo:7731.T - News). ASML's customers include the world's largest chip maker Intel Corp (NasdaqNM:INTC - News) and Taiwan Semiconductor Manufacturing (Taiwan:2330.TW - News), the world's largest contract chip maker.