SAN JOSE, Calif. -- The fab-tool market is sinking, as Lam Research Corp. and Rudolph Technologies Inc. have separately lowered their forecasts.
In the fourth quarter, Lam (Fremont, Calif.) projects that shipments will range from $212-to-$225 million, revenue from $270-to-$285 million and ongoing EPS from minus $0.04 to minus $0.05.
In other words, Lam sees a huge drop in Q4. Revenue for the third period was $440.4 million and net income was $8.9 million, or $0.07 per diluted share.
In November, Lam Research announced restructuring activities, including layoffs. The charges associated with the restructuring activity are expected to be approximately $20-to-$26 million.
These charges consist of approximately $15-to-$20 million of cash charges related to one-time termination benefits associated with the company's reduction in force as well as non-cash charges for asset impairments of approximately $5-to-$6 million.
''Business conditions in the semiconductor equipment sector have deteriorated further in recent weeks. The weakness in memory pricing, the softening end-user demand environment, and restrictions in the capital markets have caused our customers to dramatically reduce their equipment purchases,'' said Steve Newberry, president and chief executive of Lam Research, in a statement.
Another vendor, Rudolph (Flanders, N.J.), now expects a reduction in revenue of between 50-to-60 percent for the fourth quarter, resulting in a net loss of $0.07 to $0.11 per share before charges.
These adverse market conditions will also cause the company to record a non-cash impairment charge, estimated to be in the range of $200 to $235 million, related to the impairment of goodwill and intangibles.
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 Thursday (Dec. 18) by market research firm Gartner Inc.
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