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Michael Splinter, President and Chief Executive Officer of Applied Materials, noted in the company's fiscal Q3 conference call that the trough in semiconductor capital equipment spending had been reached, and that he expected increase orders through the end of year. Importantly, he noted that spending in 2009 should improve over the spending slump this year. Though cautious in giving his own specific forecast at this time, Splinter said, “I think it is fair to say I expect capital spending to be up year-over-year in ’09. As you know last time I said that I really felt our Q3 was the bottom of the trough, and that we would see a modest recovery. I am sticking to that at this time.”

Splinter also noted that they were tracking more than 40 300mm fab projects that will eventually materialize but the timing of these projects was difficult to gauge due to the economic uncertainties.

“I think if you look at overall utilization in the industry, it is very high, it is still increasing so there is not a lot of capacity out there, and if overall economies get better, I think the second half of 2009 will be good,” noted Splinter.

Splinter also noted that he expected a renewed capacity expansion in the NAND flash market in 2009 and beyond due to the momentum in solid state drive applications demand.

Fab utilization levels continue to climb during a period of very low equipment spending that must at some stage force chip manufacturers to further expand capacity to meet demand.