Makers of chip equipment feel the pain of a slowdown; vulnerable to semiconductor cycles, manufacturers cope by consolidating

Article Abstract:

The semiconductor production equipment industry is experiencing a slump and vendors are learning that it is not wise to depend on a single type of customer in a cyclical industry. The decline in orders for equipment reflects the slowdown in PC sales and the resulting diminished demand for chips. This trend began to affect chip vendors in the fall of 1995, but has just reached the production equipment vendors. Applied Materials reported a 22% decline in orders for its 3rd qtr and Lam Research has laid off about 2% of its employees. The production equipment market is expected to decline from a 77% growth rate in 1995 to 17% growth in 1996 and a 16% decline in 1997. The construction of new chip factories is expected to be placed on hold until chip demand increases. Some vendors are expanding into other markets, such as the production of equipment for making laptop screens or new chip-manufacturing technologies.

Forecasts and trends, Industry trend

---

Now, Applied Materials is cast as bully of the industry; lawsuits fly as chip-gear maker defends patents, rival asserts antitrust issues

Article Abstract:

Applied Materials has filed a lawsuit against Varian Associates for patent infringement and Varian is fighting back with antitrust charges. Varian claims that Applied bundles its products unfairly and in a manner that prohibits rival companies from competing with it. Specifically, Varian alleges that the chip-equipment maker offers its customers a free machine when they buy another, thereby selling selling its equipment below cost and attempting to drive the competition out of business. Varian sold its chip-equipment business to Novellus, a company that lost a $80 million dollar lawsuit to Applied in early 1997. Immediately after Novellus acquired Varian, Applied again filed a lawsuit against the company, this time for infringement rights.

Semiconductor industry, Company legal issue, Cases, Copyrights, Novellus Systems Inc., AMAT, NVLS, Patents, Patent/copyright issue, VAR, Varian Associates Inc., Applied Materials, Inc.

---

Some analysts say turmoil in Asia makes Applied Materials attractive

Article Abstract:

Applied Materials, Santa Clara, CA, the leader among semiconductor capital-equipment companies, is named as a buying opportunity by some industry observers. Applied, which controls 13% of a $34 billion market, is poised to exploit the industry's downturn. Previously, when the industry has slumped, Applied has taken advantage of its strong cash position by purchasing competitors with low stock prices. Thus, Applied has been able to increase its market share even in difficult times. Applied's own stock has dropped to $29 late in Dec 1997, down from a 52-week high of about $54 on Aug 20. However, the company has $1.5 billion in cash that could be used to pick off rivals, and in any event, analysts predict a strong rebound.

Economic aspects, Asia, Securities, Applied Materials Inc., Company securities

Similar abstracts:

• Abstracts: Chip sales indicator falls to 5-year low; a semiconductor selloff is expected. Key semiconductor index falls for 2d month
• Abstracts: Chip sales indicator falls to 5-year low; a semiconductor selloff is expected. part 2 National Semiconductor posts loss for 4th quarter; but operating earnings exceed estimates
• Abstracts: Ameritech's long-distance bid expected to fail. Now there's a way to reach your files from all your PCs
• Abstracts: One Web magazine avoids mediocrity of usual on-line fare. The Web produces a home-grown source for breaking news
• Abstracts: Silicon Valley cuts donations to President over tort reform; money from computer industry drops by half. Microsoft presses its view about rivals' 3-way deal

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.