SAN FRANCISCO—Semiconductor production equipment vendor Applied Materials Inc. Tuesday (July 10) cut its sales outlook for its fiscal year 2012, which ends in October, citing weaker than expected near-term demand in its semiconductor business, primarily among foundry customers.
Applied (Santa Clara, Calif.) said the company now expects sales to be below its fiscal 2012 target of between $9.1 billion and $9.5 billion. The company said it also expects its pro forma earnings per share to be below its previous expectations of 85 to 95 cents per share—possibly as low as 65 to 75 cents per share.
Applied said it expects its financial results for the third quarter of fiscal 2012—which closes July 29—to be down by up to 10 percent from fiscal second quarter sales of $2.54 billion. The company previously said it expected sales for the fiscal third quarter to be flat to down 10 percent compared to the fiscal second quarter. Applied said Tuesday it expects pro forma earnings per share for the fiscal third quarter to be in the lower half of its previously stated target range of 21 to 29 cents.
Applied also revised its calendar year 2012 industry forecast for wafer fab equipment spending to between $30 billion and $33 billion, compared to its previous expectation of $32 billion to $35 billion, in line with the market changes.
Weakness among foundry customers is a troubling sign for Applied and other chip equipment vendors. As recently as May, following its fiscal second quarter report, Applied
credited "robust" spending among foundry customers, primarily for increasing 28-nm production capacity, with helping the firm beat consensus analysts' expectations for sales.
On Monday, fab tool vendor trade group SEMI said it expects total semiconductor equipment sales for 2012—including packaging, test and assembly equipment—
to slip 2.6 percent from 2011 to total $42.4 billion. The organization said it expects sales on wafer processing equipment to fall to $33 billion, down 3.8 percent from 2011.
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