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

To: TI2, TechInvestorToo who wrote (6457)	7/14/2003 10:20:22 PM
From: Proud_Infidel	Respond to of 25522

Applied to expand used equipment business By Mark LaPedus Semiconductor Business News 07/14/2003, 1:35 PM ET SAN FRANCISCO -- During the Semicon West trade show here today (July 14), Applied Materials Inc. disclosed that it plans to expand its used equipment business and claimed it is now one of the world's largest players in this arena. Applied is planning to set up a new collection of used equipment centers worldwide, in an effort to expand into this growing business, according to company officials. The company has been in the used equipment business for years, but it has kept a relatively low profile in the arena. The Santa Clara, Calif.-based company mainly sells its own used or refurbished equipment in the channels. It's a little known fact, but Applied is now a major player in the business, competing against the likes of GE Capital and a slew of other used equipment suppliers and brokers in the marketplace. "We are close--or are the largest--used equipment supplier in the industry," said Joseph Bronson, executive vice president and chief financial officer for Applied, during an analysts meeting at Semicon West on Monday. The company hopes to expand that sector, reportedly in a move to capture more business in China. Although China is setting up new and advanced 8-inch fabs, the nation's chip makers are reportedly buying a relatively huge amount of used gear, according to analysts. The used fab-equipment industry is substantial. In 2001, the used equipment market for IC, ATE, and PCB applications was a $2 billion industry in terms of worldwide sales, according to analysts. To capture more of that business, Applied plans to set up some new "regional refurbishment" centers, Bronson said. Applied has refurbishment centers in Asia, but it plans to expand those operations into Europe and the United States. The big market for used gear is located in Asia. "China has been a large market for used equipment," Bronson said. At the same time, the current and severe IC downturn has put enormous pressure on semiconductor makers to cut their manufacturing costs--a trend that has propelled the used or secondary fab-equipment markets, especially in China. The used chip-equipment market has been around for years. To complement their tool procurement efforts, semiconductor makers, IC-packaging providers, and chip-testing houses over the years have procured a range of low-cost, used fab-equipment from third-party companies, brokers, and even Web-based auction sites. Generally, however, the used equipment industry gets little or no attention in the marketplace--sometimes by choice, according to analysts. While resellers generally sell older and refurbished tools, these entities also tend to work in the shadows, especially given that they sometimes compete for accounts against the tool suppliers themselves, according to analysts. And used equipment providers offer at least one obvious advantage over tool vendors in the marketplace: lower cost fab gear. But still, there are some major challenges for both new and used chip-equipment providers today (see Nov. 19, 2002 story ).