SemiTool slashes jobs; K&S cuts pay

SAN JOSE, Calif. -- More bad news: SemiTool Inc. has apparently implemented another layoff, while Kulicke & Soffa Industries Inc. (K&S) has taken pay cuts.

SemiTool has cut 280 jobs, according to a report. That story can be read here.

Fab-tool maker SemiTool (Kalispell, Mont.) cut about 170 workers in November.

Amid a loss for the quarter, fab-tool vendor K&S (Fort Washington, Penn.) in November reduced its headcount by 240 positions and scrapped its annual salary increases scheduled for January.

Now, K&S' executives are taking pay cuts. That can be read here.

C. Scott Kulicke, chairman and CEO, will take a 20 percent pay cut. ''Base salaries for other company employees, except direct labor, will be reduced by 10 percent,'' according to a company filing.

''Direct labor employees will have reduced work schedules on a factory-by-factory basis according to manufacturing demand levels. Salary reductions will be effective February 2009, subject to local labor regulations outside the U.S., and will continue until business conditions improve,'' according to the filing.

''Salary reductions will apply company-wide, with the exception of the company's wedge bonder business unit, which is expected to implement a similar level of cost reductions in the next several weeks,'' the filing said. ''The company anticipates it will take additional actions in fiscal 2009 to further reduce cash expenditures if business conditions remain weak.''

Based on the early returns, the fab-tool and electronic materials markets are off to a rocky start in 2009. Amid the current IC downturn, FBR Capital Markets has now downgraded many of the top players in the business. Applied Materials, ASML, FormFactor, KLA-Tencor, MEMC and Teradyne have been downgraded from ''outperform'' to ''market perform.''

Times are bad in the sector, which faces another downturn. Applied, Axcelis, Cognex, Entegris, FSI, Intevac, KLA-Tencor, Lam, Mattson, Micronic, SemiTool, Tegal and other fab-tool makers have recently announced layoffs.

Semiconductor equipment spending is projected to decline 30.6 percent in 2008 and another 31.7 percent in 2009, according to a revised forecast issued by market research firm Gartner Inc.

The economic recession and supply-side issues will drive semiconductor manufacturers into "panic mode" for the first half of 2009, cutting capital spending even more deeply than 2008, according to Gartner. In October, Gartner projected that chip capital spending would decline 25.2 percent this year and 12.8 percent in 2009.