Somewhat dated news, but I don't recall seeing it on the thread.
Applied Materials Sees Sustained Order Gains: Bloomberg Forum
New York, Nov. 5 (Bloomberg) -- Applied Materials Inc.
Chairman James Morgan said the pace of orders from semiconductor
makers accelerated earlier this year, putting the company on
track to generating $10 billion in annual revenue by 2002.
While Morgan declined to be specific pending announcement of
results for the fiscal year ended Oct. 26, he said the company
will announce a backlog of orders that surpassed the third
quarter's $1.65 billion.
Orders from chipmakers ''are what generally drives the
industry,'' the Applied Materials chairman said. Full-year
revenue will ''approach $4 billion,'' about 3 percent below last
year's record $4.14 billion.
''We clearly have the ability to grow to be a $10 billion-
plus company,'' Morgan told the Bloomberg Forum. ''And there are
opportunities to grow from there.''
The Santa Clara, California-based company is already the
world's largest maker of semiconductor-manufacturing equipment.
It took a pounding, though, when a prolonged slump in computer
chip prices began suddenly two years ago.
Now, Morgan said, the pace of orders is accelerating again,
especially in the last two quarters. What's more, Applied
Materials ''is gaining share in most of our product areas'' as
customers move to building much smaller chips on 12-inch wafers
that require more manufacturing steps.
Nine-Month Decline
Applied Materials' nine-month net income fell 40 percent to
$318.34 million, or $1.70 a share, from $526.51 million, or
$2.86, for the year-earlier period. Revenue fell 15 percent to
$2.79 billion from $3.28 billion.
Morgan declined to discuss full-year earnings. Applied
Materials is expected to earn $1.35 a share, the average estimate
of 30 analysts polled by IBES International Inc., down from the
$1.64 it earned a year earlier when adjusted for a 2-for-1 stock
split effective Oct. 13.
The Applied Materials chairman said the company hadn't been
hurt by Asia's recent economic turmoil. Orders from Taiwan might
grow because of a strengthened currency, he said.
His company's commitment to providing ''total solutions
capability'' to the industry is helping to fuel a new order boom,
Morgan said. Last week, the Semiconductor Industry Association
forecast that global chip sales will rise almost 17 percent to
$162.6 billion next year.
The move to smaller densities helps Applied Materials sell
more products because its systems are used in a wide range of
manufacturing processes, such as ion implantation, etching,
chemical vapor deposition and for the first time this year,
measurement and wafer inspection.
Morgan, 59, a mechanical engineer who's been chief executive
of the company for almost 21 years and chairman for almost 11,
said the average chip now requires 350 separate production steps,
''a lot more'' than just two years ago. Applied Materials'
systems now are involved in about 22 percent of all those steps,
compared with 14 percent a few years ago.
Inspection Growth
During the first quarter, Applied Materials acquired two
Israel companies, Opal Inc. and Orbot Instruments Ltd., for a
combined $285 million, to enter the wafer-inspection and
measurement markets.
''That technology is in its infancy,'' Morgan said, because
the tiny sizes of new chips will require a sharper focus on
''diagnostics and control.''
The measurement and inspection equipment market is expected
to triple to ''$3-billion-plus'' soon from only $1 billion this
year, Morgan said.
Industry Consolidation
As other semiconductor-equipment makers get bigger by making
acquisitions, Morgan said he isn't concerned about Lam Research
Corp.'s $225 million acquisition of OnTrak Systems Inc. and KLA
Instruments Corp.'s $1.4 billion purchase of Tencor Instruments.
Applied Materials doesn't see them or other rivals, such as
Varian Associates Inc., as across-the-board competitors, he said.
Applied Materials will ''selectively'' purchase other
companies if they have a desirable technology, said Morgan, who
added that his company already spends more than $500 million
annually in research, development and engineering.
To keep on top of the latest computer chip technology,
Applied Materials has been working ''for several years'' on
International Business Machines Corp. breakthroughs involving use
of copper as a more powerful semiconductor than conventional
silicon, Morgan said.
Paul Low, former head of IBM's semiconductor operations, is
an Applied Materials director.
The company is working with several customers on
applications using copper, Morgan said, without disclosing them. |
