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

To: John Stichnoth who wrote (28561)	2/25/1999 3:04:00 PM
From: KM	Read Replies (3) \| Respond to of 70976

Semiconductor Exec Warns of Different Y2K Danger in Sector By David Shabelman Staff Reporter 2/25/99 2:25 PM ET SAN FRANCISCO -- Speaking at the BancBoston Robertson Stephens Tech Conference, Applied Materials (AMAT:Nasdaq) CFO Joseph Bronson said he sees the possibility of semiconductor demand exceeding production capacity by about 5% in the year 2000. "We haven't seen this since 1994," he said. "We are watching this very carefully. This is a very key thing." Undercapacity in the semiconductor industry means that chipmakers have to spend money for new equipment and production facilities. Applied Materials is considered the bellwether of the semiconductor-equipment sector. Bronson also said the company is striving toward new levels of profitability, shooting for a 50% gross margin, which is something the company has never done. Last quarter, the gross margin was 48.1%. He added that some business units are achieving even better gross margins. The semiconductor-equipment market has been in a slump for more than a year because chip companies have not been spending significantly on new equipment or manufacturing plants. -- Marcy Burstiner