By Peter Henderson and Scott Hillis
NEW YORK/SAN FRANCISCO (Reuters) - Applied Materials Inc (AMAT.O: Quote, Profile, Research, Stock Buzz) expects capital spending by contract chip makers to pick up next year as demand begins to overcome excess capacity in memory chip manufacture, Chief Executive Mike Splinter said on Tuesday.
Contract chipmakers who use Applied Materials' equipment, which include Taiwan Semiconductor Manufacturing Co (2330.TW: Quote, Profile, Research, Stock Buzz) and United Microelectronics Corp (2303.TW: Quote, Profile, Research, Stock Buzz), would step up spending next year as they increased production of chips etched with smaller circuitry, Splinter said.
"I think you can expect double digits, significant double digits," Splinter said when asked about chipmaker spending at the Reuters Global Technology, Media and Telecoms Summit in New York.
Other chip companies looking to survive the current downturn could link up resources, though not necessarily in outright mergers, he said.
"I'm not so sure that companies go away so much as there are manufacturing and capacity and R&D alliances," he said.
SLOW RECOVERY
Applied Materials is the world's largest supplier of tools and equipment for making microchips. Last week the company said it saw a semiconductor equipment industry downturn hitting bottom, and on Tuesday Splinter added that recovery would be slow, especially in the face of weak memory demand.
Memory chip market prices have plummeted this year as manufacturers race to protect market share by adding capacity. Continued...
© Thomson Reuters 2008. All rights reserved.
| Paper | Aug 20 - 21, 2008 | Manufacturing |
| Japan Investment | Jul 01 - 2, 2008 | Country Summits |
| Global Real Estate | Jun 23 - 25, 2008 | Real Estate |
| Consumer and Retail | Jun 16 - 18, 2008 | Consumer Retail |
| Investment Outlook | Jun 09 - 12, 2008 | Financial Services / Exchanges |
