March 1, 2001–As a result of the continuing weakness in semiconductor industry fundamentals, Lam Research Corp. has issued a revised business outlook and is implementing a cost-reduction plan. However, the company intends to maintain its spending on strategic development programs that address the ongoing transition to new materials such as copper and low-k dielectrics.
“Our customers continue to report slowing end-user demand and softening business conditions,” says James W. Bagley, Lam’s chairman and CEO. “Their capital spending plans are being adjusted accordingly. These factors have resulted in a reduction in new equipment orders, delivery push-outs, and cancellations of systems in our backlog. Driven by the uncertainties in the market today, the attainment of our previous guidance of $480 million to $490 million in revenue is at risk. Our revenue for the March quarter could decline as much as 15%, which would result in an impact to earnings. These changes in our outlook are not the result of a change in competitive position, nor the loss of market share, but reflect the restraint in our customers’ spending.”
The company’s cost-reduction plan includes 5 mandatory shut down days per quarter, Board of Director and executive salary cuts of up to 10%, and merit increase delays.