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Applied Materials posts $515m loss as silicon demand wanes

Expects improvements next year
Fri Nov 16 2012, 16:37

EQUIPMENT MAKER Applied Materials reported a $515m loss for its fourth fiscal quarter as silicon orders dried up.

Applied Materials supplies chipmakers such as Intel and Samsung with raw materials and silicon wafers, which puts the firm in a unique position to measure the health of the semiconductor industry. The firm revealed that sales fell by 24 percent last quarter to $1.65bn resulting in a loss of $515m.

According to Applied Materials' breakdown of revenue, its Silicon Systems Group saw orders fall by 36 percent, citing a drop in orders for foundry and memory products. Not only were the firm's order books lighter, the order sizes were smaller with Applied Materials reporting a 44 percent drop in revenue for its silicon group.

Applied Materials chairman and CEO Mike Splinter said, "We see improving business conditions entering 2013, with orders projected to increase after bottoming in the fourth quarter. Accelerated changes in device technology and the adoption of new materials in all of the industries we serve provide opportunities for Applied [Materials] to build on our leadership and grow our market share."

Applied Materials' results paint a different picture from that of the Semiconductor Industry Association (SIA), which said global chip sales were marginally up in September. The difference between SIA's figures and Applied Materials' financial results is that typically the products sold by Applied Materials to chipmakers are for future production, suggesting that the industry is expecting a dip in demand in the coming months.

While Applied Material's $515m quarterly loss will raise eyebrows, the firm said it expects its business to improve in 2013. µ


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