Nov. 22, 2000–Applied Materials, Santa Clara, CA, said sales in its fourth quarter, ending October 29, hit an all-time record $2.92 billion, with orders rising 10% to $3.60 billion. Fourth quarter sales saw a 7% increase over the third quarter and an 81% increase over the $1.61 billion logged in 4Q99. Net income totaled $664 million, or $0.77 per diluted share.
While AMAT’s earnings are impressive, analysts at Thomas Weisel Partners heeded some caution in their overall review of Applied quarterly statement, “We are lowering our 2001 estimates on looming DRAM and foundry spending concerns, even though 4QFY00 came in slightly ahead of expectations. Though we believe AMAT has the potential to still grow revenues and bookings sequentially for the next several quarters due to the increased demand for new leading-edge fab capacity, the company noted that weak DRAM pricing and a telecommunications slowdown may impact DRAM manufacturer and foundry capital expenditures in CY01,” noted TWP.
Of the $3.60 billion in orders, AMAT received some 43 orders valued at greater than $10 million, eight of which were valued at >$100 million, said analysts from Chase Securities in a research note. “Orders for 0.18 micron and smaller devices accounted for approximately 75% of the total bookings, this is up from 71% in Q3F00. DRAM manufacturers made up approximately 28% of the quarterly bookings, with a rather large concentration from one particular order. Next quarter’s DRAM bookings are expected to return down to a level below 20%,” notes Chase analyst Eric Chen.
The record 4Q orders mark a 10% increase over 3Q orders and a whopping 113% increase from the $1.69 billion in orders received during the same period a year ago. On a regional basis, North America accounted for 29% of the total orders while Japan accounted for 21%, three points lower than the prior quarter. Taiwan and Europe accounted for 14% and 15%, respectively. Southeast Asia and China were each at 11% and orders from Korea increased three points to 10%. Backlog for the second quarter was $4.38 billion.
Applied chairman and CEO James Morgan said he believes the industry has now entered the Information Age and the company sees many new opportunities on the horizon. “In the coming year, we expect our customers to increase their investment in advanced technologies for smaller line-widths, 300mm product capabilities and advanced materials applications,” Morgan noted.
Applied said orders for 300mm tools accounted for less than 10% of all 4Q orders. And in the coming year the company expects orders for 300mm to grow, stating that its customers need to spend money on 300mm, copper, and low-k technologies, “to fuel the future.”
In 2001, analysts predict that the industry will spend a total of $6 billion to $8 billion on 300mm fabs, tooling and equipment. In the quarterly conference call officials at Applied said “it’s quite possible” that they may see revenues for 300mm equipment of $1.8-$2 billion in 2001.
By Meg Villeneuve
WaferNews 11/20/00