Applied Materials Adapts to Smaller Chips
Applied Materials Inc., the maker of equipment for the semiconductor industry, announced plans Monday to enhance its products for the next generation of faster, smaller and cheaper chips.
The new technology will allow chip makers such as Intel Corp., Advanced Micro Devices Inc. and others to squeeze more circuits onto the chips that power computers and a growing number of consumer and business devices.
Despite the announcement, shares of Applied Materials were down $4.41, or 9.5%, to close at $41.95 on Nasdaq. In extended trading, shares were down an additional $1.17, or 2.2%, to $40.78. Applied’s equipment will be able to handle circuits less than 100 nanometers in size, a 44% reduction compared with today’s machines. A nanometer is about 10,000 times narrower than a human hair and about four times wider than an atom.
The announcement, made during the Semicon West trade show in San Francisco, is the latest in recent months indicating the semiconductor industry can sustain the pace of Intel co-founder Gordon Moore’s famous prediction that the number of transistors on a chip would double once every 12 to 18 months.
“We are helping to increase the power, extend the reach and lower the cost of chips to the world’s consumers,” said James Morgan, Applied’s chief executive.
The smaller, more powerful chips are increasingly important as companies develop plans to merge the functions of computers, cell phones, hand-held organizers, televisions and games into single products.
In the not-so-distant future, the company said, chips the size of a dime or smaller will be able to store billions of units of information.
Intel, which is expected to release 130-nanometer chips in the near future, plans to use 100-nanometer processes by 2003. Applied said it expects to have its 100-nanometer equipment available by the end of this year.
Both Intel and IBM Corp. have announced breakthroughs this year in developing faster and smaller transistors.
Despite the advances, the semiconductor industry is in the midst of a downturn that only recently showed signs of bottoming out. In May, Applied said it expects second-quarter orders to be down 44% from the previous quarter, with improvement coming in the second half of the year.
