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October 4, 1998

APPLIED MATERIALS HIT BY CHARGE FROM JOINT VENTURE

By CBR Staff Writer

Semiconductor equipment manufacturer Applied Materials Inc has announced that it will take a charge in its fourth quarter as a result of restructuring in its joint venture with Japanese firm Komatsu Ltd. Applied Materials would not divulge the size of the charge, which comes on top of a previously-announced, but also unspecified, charge for the quarter from its own restructuring in August (CI No 3,482). The company said then it would be cutting 2,000 staff, or 15% of its workforce, and would take a charge that would leave it with a loss for the quarter. Applied Komatsu Technology Inc (AKT), a 50-50 venture between the two firms which provides flat-panel display production equipment, said Friday it would restructure to better align its expenses with expected revenue levels. AKT’s actions will include a reduction in workforce, a consolidation of facilities and asset write-downs, but no further details will be disclosed until the plan is completed – sometime before October 31. AKT will now focus on chemical vapor deposition systems for the flat panel display market, discontinuing sales of two other types of systems. The moves come as a result of many factors, according to AKT, including Asia’s economic downturn, slower-than-expected adoption of flat panel display technology by the PC industry and an overall slowdown of growth in the PC market. Applied Materials will report results for the quarter and year some time in November. Analyst surveyed by First Call are expecting net income of $0.03 per share before the effects of one-time charges. The company’s stock edged up $0.1875 Friday, to close at $23.9375.

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