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Despite record quarterly revenue and earnings, Applied Materials chairman and chief executive, Mike Splinter rattled-off a number of depressing conditions in a conference call to discuss quarterly results that were tempering short-term economic growth, which would impact orders at the equipment supplier.

Rising inflation in emerging markets and reduced consumer confidence as well as the turmoil caused by the natural disasters in Japan where only some of the issues raised.

Splinter also highlighted the unrest in the Middle East, which had generated uncertainty about energy prices and fuel cost. He also noted that DRAM capital investment remained low and limited to technology conversions only at the moment as overcapacity remains an issue and prices remain depressed.

This all led to Splinter lowering expectations on wafer fab equipment spending for 2011. Splinter noted in the call that WFE capital spending is expected to be in the range US$31 billion to US$34 billion.

In February, 2011 Splinter had forecasted WFE spending would be in the range of US$34 to US$36 billion.

However, Splinter later reiterated the WFE spending forecast given at its recent analyst event for 2012, which is for spending to be in the range of  US$35 billion plus or minus a couple of billion dollars. However, with equipment order push-outs already impacting quarterly results at Applied, the forecast could actually be at the low level.

Despite the downward revised spending forecast for this year, Splinter noted that the longer-term outlook for WFE spending remains strong.

“Industry fundamentals remain solid, with the top spenders reaffirming or increasing their capital investments,” noted Splinter in the conference call. “The leaders in logic and foundry are accelerating their plans for the 28- and 22-nanometer nodes, and increasing their investments in leading-edge technology.”