Applied Materials sees big drop in 2013 tool spending

Applied Materials sees big drop in 2013 tool spending

SAN FRANCISCO—Applied Materials Inc. expects semiconductor equipment spending to decline 5 to 15 percent in 2013, a much steeper decline than market research firm Gartner Inc. predicted last month.

Michael Splinter, Applied's chairman and CEO, said in a conference call following Applied's most recent quarterly report last week that the firm expects wafer fab equipment spending to decline for a second consecutive year based on an anticipated pullback in logic and foundry spending and continued weakness in the memory chip market.

Applied's quarterly sales and profit beat expectations, but its forecast for the current quarter fell short of analysts' estimates.

Applied said it expects wafer fab equipment spending to be between $30 billion and $32 billion this year, falling to between $26 billion and $30 billion next year.

Gartner said last month it expects chip equipment sales to decline about 1 percent next year. The market research firm estimated that fab tool sales will be about $31.4 billion this year, down 13 percent from 2011.

"We think foundry and logic spending are going to be down modestly next year, kind of in that 10 percent range," Splinter said. "And then memory spending is pretty much going to be flattish at the low level of 25 to 30 percent of overall wafer fab equipment spending."

Earlier this year, strong spending on 28-nm capacity by foundries was keeping Applied and other equipment vendors in the black. But Applied reported in October that foundries were pulling back on spending dramatically.


Next: Outlook clouded
TAG:Applied Materials Fab Tool Spending 2013