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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: zsteve who wrote (24434)	9/19/1998 7:05:00 PM
From: zsteve	Read Replies (1) \| Respond to of 70976

FRM BARRONS: interactive.wsj.com >>....... There was plenty of incremental info from the semiconductor-equipment makers, most of it depressing. Joseph Bronson, chief financial officer at Applied Materials, said demand for chip-making gear continues to be hurt by a glut of memory chips, the popularity of ultracheap personal computers, and the Asian economic mess. Bronson says the supply and demand imbalance in DRAMs could be corrected sometime in the second half of 1999. However, he warned that chip demand might not ever return to its previous historical growth rate. He also noted that Applied's recent cost-cutting moves, which included some steep layoffs, had reduced its quarterly break-even point to about $600 million in sales. Applied, he says, was "drawing a line in the sand," and wouldn't make further cost cuts. Hmmm. Was Bronson effectively preparing the Street for the possibility that Applied could drop into the red? We'll see. Bronson didn't join the chorus of optimists who've been cheered by a recent uptick in the spot price for DRAMs, warning that the modest rise could simply reflect some seasonal strength as PC makers gear up for Christmas. Richard Hill, chairman and CEO of Novellus Systems, one of Applied's rivals, was similarly gloomy. He sees the downturn in equipment demand continuing for at least another two quarters. Mitchell Tyson, president and CEO of PRI Automation, which makes systems for moving silicon wafers around semiconductor manufacturing plants, seemed a tad more optimistic. "My sales guys feel that its not getting any worse," he comments. "In 1999, we should begin to see things moving up, with people investing in new fabs for competitive reasons." Jerald Fishman, CEO of the chip-maker Analog Devices, noted that the depressed state of the automated test equipment segment, systems used in the last stages of chip production, are clipping his company's sales to the tune of $25 million a quarter. When demand in the test business does recover, he notes, his company should see it first. And so far, he hasn't seen it. Arthur Zafiropoulo, the outspoken CEO of equipment-producer Ultratech Stepper, forecast that demand for semiconductor-manufacturing gear might not recover for another six quarters, which would take us into early 2000. Now, that's a Y2K problem. ......<<<