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