SAN JOSE -- Silicon Valley Group Inc. today cut its revenue forecast for the second quarter and announced the layoff of 400 employees, or 10% of its workforce, as the company prepares to be acquired by ASM Lithography within the next week or two.
SVG said it was laying off employees and adding two shutdown weeks this summer to a previously announced reduced work schedule in response to weaker demand for semiconductor production systems--especially non-lithography tools.
Last week, an ASML executive said the Dutch lithography supplier did not anticipate significant layoffs at SVG as a result of its pending acquisition. However, he said ASML has asked SVG to size its workforce appropriately for weaker market conditions and the likelihood that a recovery won't occur until 2002 (see May 9 story).
San Jose-based SVG today said it is now forecasting a 30-to-40% sequential drop in sales from $208.9 million in the fiscal quarter, ended March 31. SVG posted a net income of $6.1 million in that the last quarter, and it previously said revenues were expected to decline by 15-to-25% in the current three-month period.
SVG said it has received additional requests from chip manufacturers to delay shipments of products that were scheduled to be delivered in the current quarter. These order delays were for SVG's non-lithography systems--which include thermal and track-processing equipment.
"SVG is acting in a responsible way to size the company to current industry demand," said Papken Der Torossian, chairman and chief executive officer at the San Jose company. "During these difficult times the company will focus on new products and internal efficiencies to position SVG to take advantage of the eventual recovery."
The company is currently shutting down five days in the second quarter of 2001, and now it is planning to close operations during two holiday weeks in the next three-month period (July 2-6, and Sept. 4-7). During these shutdown weeks, SVG said it will continue to maintain operations for customer support and critical R&D projects.
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