This year’s volatile downturn in the world’s semiconductor markets appears to have deepened.
Bellwethers Intel and Applied Materials projected on Tuesday deep slumps in sales and orders, and Applied, indicating there is no time to wait, triggered a layoff of 12 percent of its work force.
It is unknown how deep the setback will go, says George Davis
The dual dose of bad news came as the financial markets plummeted again with the Dow Jones Industrial Average off 411.30 points and the tech-heavy Nasdaq down a comparatively greater 81.69 points. The watch word in technology markets was uncertainty.
“It’s really not known how deep this economic setback will go,” said Applied CFO George Davis on a conference call with analysts.
In a press release, Intel said fourth-quarter sales would be $900 billion, plus or minus $300 million, or well short of the $10.1 billion to $10.9 billion the chip maker projected last month.
Demand weakened in all geographies and all markets, the company said. Intel plans to lower spending modestly in the quarter to $2.8 billion from $2.9 billion.
Applied rejected such tepid measures. The supplier of manufacturing equipment to semiconductor makers said it would restructure operations in the present quarter by cutting 1,800 jobs, or 12 percent of workers, and slashing annual expenses by $400 million.
There has been a “rapid slowdown at many of our customers,” Davis said. Applied, which reported steady fourth-quarter results on Tuesday, said first quarter products orders are expected to fall a substantial 30 percent and revenue will decrease 25 percent to 35 percent.
Just as significantly, the company backed away from previous claims its emerging solar business would reach breakeven in 2009. “We’ll have to see how demand plays out,” Davis said.
It also showed a hesitancy toward acquisitions during the downturn. “I thinkn we will say no more often than we say yes,” said CEO Michael Splinter.
Posted by Mark Boslet 
