Lam Research Corp., Fremont, Calif., said slumping demand from chip makers is forcing it to implement a cost-reduction plan.
The maker of semiconductor equipment said it would shut down for five days per quarter. Executives and members of the board of directors and executives will have salary cuts up to 10%, and merit increases are being delayed. All discretionary spending is under priority review, it added.
"Our customers continue to report slowing end-user demand and softening business conditions," said James W. Bagley, Lam's chairman and chief executive officer, in a prepared statement. "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 $480.0 to $490.0 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 statement added.