News

30 January 2009

 

Lam goes into loss; revenues to drop a further 38%

For its fiscal second-quarter (ended 28 December 2008), etch and wafer-cleaning equipment maker Lam Research Corp of Fremont, CA, USA has reported revenue of $283.4m (down 36% on last quarter’s $440.4m and 54% on $610m a year ago). Of total revenue, 32% came from the Asia-Pacific, 22% from Japan, 17% from Korea, 17% from North America, and 12% from Europe.

Excluding charges such as asset impairments and restructuring activities (announced on 20 November and due for completion this quarter), ongoing operating expenses have been cut from last quarter’s $149.9m to $126.5m, driven by a reduction in employee variable compensation expenses, a reduction in deferred compensation liabilities due to recent stock market declines, and the partial quarter impact of December-quarter restructuring activities.

However, gross margin still fell, from 42.3% last quarter to 38.5%, due mainly to reduced manufacturing and field utilization levels and product mix challenges resulting from the reduced business activity. Ongoing net loss was $11.7m compared to ongoing net income of $32.6m last quarter.

During the quarter, cash flow from operating activities was about $39m. Nevertheless, cash and cash equivalents, short-term investments and restricted cash and investments balances fell from $1.2bn to $1.1bn. Deferred revenue and deferred profit balances at the end of the December quarter were $68.4m and $54.2m, respectively. The anticipated future revenue value of orders shipped to Japanese customers that was not recorded as deferred revenue was $8.6m.

For its fiscal third quarter, Lam expects revenue to fall a further 38% to $175m(±$15m). During the quarter, the firm will cut salaries for all employees, ranging from 17.5% for the CEO to 2.5% for its lowest-paid staff.

“The global semiconductor industry has entered one of the most difficult periods in its history, one that is presenting severe challenges to our customers and thus severely limiting investment in wafer fab equipment,” says president & CEO Steve Newberry. “While this environment will persist near-term, we remain optimistic about our long-term technology roadmap in etch, clean and other new markets,” he adds.

“During the pause in customer spending we are strategically targeting our capital resources to new penetration opportunities, qualifying our next-generation tools and delivering cost-effective technology solutions aimed at reducing our customers' production costs,” Newberry says. “Our objective through these actions is to deliver superior value to our customers and emerge from this period of reduced spending well positioned to deliver strong financial and operational performance.”

See related item:

Lam expecting 35-39% sequential revenue drop

Search: Lam Research

Visit: www.lamresearch.com