Technology Would Face Decline in Time of Negative Outlooks by Applied Materials and AMD
Applied Materials Inc., Santa Clara based maker of equipments for chip making, display and solar industries, has revised its fiscal year 2012 sales and earnings outlook in Europe, China and the PC market on Tuesday in the times of weaker demands in semiconductor equipment business and especially due to lower demands from foundry customers.
“Both China and Europe are quite weak,” Mike Splinter, CEO Applied Materials, said. “Both markets are worse than they were at this time last year.”
For the fiscal year that will end at October 28, 2012, the company’s expectations for the sale would go down and would not be able to meet the previous view of $9.1 billion to $9.5 billion as reported by the company in a statement. Earnings per share will also be less than the previous range of $0.85 to $0.95.
Not only Applied Materials has cut outlooks but Advanced Micro Devices (AMD), Sunnyvale, California, based Semiconductor Company, also cuts outlook as the second quarter revenue of the company is expected to decline by about 11%. AMD has also reported weaker sales in China and Europe for an unexpected drop.
This downturn by the companies has increased doubts of a decline in global technology spending and expected releases of new smart phones, tablet PCs and PCs.
“There’s a global slowdown,” Jerome Ramel, an analyst with Exane BNP Paribas in London, said in an interview today. “We should expect more warnings. All of the equipment guys will probably warn, and companies in the PC chain.”
“The second-quarter miss isn’t hugely surprising as poor PC data points have been pretty well telegraphed for nearly two months now,” Patrick Wang, Evercore Partners analyst, said in an email. “The PC market seems to be limping along.”
“However, the magnitude will definitely raise a few eyebrows.” Wang added.
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