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Capital spending to decline 40 plus percent in 2008, says Applied Materials’ Splinter

13 May 2008 | By Mark Osborne | News > Fab Management

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Applied MaterialsThere is a semiconductor downturn after all and it’s happening now, according to Mike Splinter, Applied Materials' President and CEO in his opening remarks covering the equipment supplier’s 2Q08 financial results. Splinter expects capital spending to decline by 40 percent or more in 2008, significantly more than previous projections of between 15 and 25 percent, due to a detailed review of key customer plans for the rest of the year.

Splinter said that Applied expects DRAM capital spending to be down by at least 50 percent in 2008, while NAND flash spending is expected to fall by at least 15 percent, compared to previous projections of up slightly compared to 2007.

Logic and foundry spending will also be down for 2008, and a close eye should be kept on when spending will kick in for 65nm capacity ramps and further technology buys for 45nm development.

Splinter also mentioned that there would be further cost-cutting measures put in place at the company, including executive pay cuts.

Update 1: In the Q&A, Splinter said that capital spending could improve off the bottom in 3Q08, however, a possible recovery would have to see a return to profitability of memory manufacturers before that would happen.  

10 memory fabs have pushed-out capacity expansions in 2008, according to Splinter.


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