By Tony Hallett, 27 August 1998 00:20
NEWS Applied Materials, a manufacturer of equipment for the semiconductor industry, has announced it will axe 2,000 staff as the global chip crisis continues unabated. In addition to the redundancies - which account for about 15 per cent of the company's workforce - executives at the Santa Clara firm will take a 10 per cent pay cut. Mitul Mehta, senior European research manager at Frost & Sullivan, commented: "Expect to see these kind of cuts across the board [in the semiconductor industry]. This crisis won't spare anyone." James Morgan, Applied Materials chairman and CEO, blamed dire economic conditions in Asia, market over-capacity and the movement toward sub-$1,000 PCs, calling it an "unprecedented convergence of three factors". Analysts have cited the same reasons for the recent decline in fortunes of other companies in the chips business, including National Semiconductor, Siemens, and even industry giant Intel. Mehta added: "Not many companies can survive this as they stand now. Even the likes of Intel will be closing fabrication plants or halting production." He said Applied Materials - which counts Intel and Texas Instruments among its customers - had probably waited as long as it could to announce the cuts, because it would not want to jettison highly skilled workers unless absolutely necessary.
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