Some briefcases at the Semicon West chip-equipment trade show this week will hold a copy of "The Worst-Case Scenario Survival Handbook," a local public-relations firm's gift that contains tongue-in-cheek tips for weathering the worst slowdown in the industry's history.
Executives could use it. Industrywide sales are forecast to drop 30 percent or more this year, Applied Materials Inc, the biggest maker of semiconductor tools, and rivals are trying to stimulate demand by introducing new services and faster, more reliable machines at the show, the largest exhibition for makers of chip-building gear.
"New products tend to be the secret weapon in economies like this," said Ned Barnholt, chief executive of Agilent Technologies Inc, the test-and-measurement equipment maker spun off from Hewlett-Packard Co last year. Agilent plans to introduce more tools this year than ever, including 200 to 300 "significant" new products, Barnholt said.
The show, which begins tomorrow in San Francisco and ends Friday in San Jose, California, is sponsored by the Semiconductor Equipment and Materials International trade group.
Attendance is expected to decline from the 65,000 investors, analysts and executives who attended last year, when sales of semiconductor-equipment soared 87 percent to US$47.7 billion, said Jonathan Davis, a SEMI spokesman.
The number of San Francisco-area hotel room nights reserved for the show slipped as much as 10 percent from 35,000 last year.
Exhibit space will be about 2 percent less than last year's 115,000m2 because many small companies won't be back, Davis said.
"This is the first time in four to five years that I've been able to call San Francisco three days before the show and get a hotel room," said Carl Johnson, president of Infrastructure, which tracks the semiconductor manufacturing industry. "Last year, it was nothing like that. I had to stay in Santa Cruz." Attendees say the show's mood is likely to be dour because of slowing sales growth for cellphones and personal computers. Chip sales worldwide are forecast to fall 14 percent to US$175.5 billion this year, according to World Semiconductor Trade Statistics.
Semiconductor-equipment com-panies have been idling plants, cutting salaries and laying off workers. Shares of Applied Materials have fallen 47 percent since last year's show. Teradyne Inc has dropped 51 percent.
Most new products introduced this year, including those from Applied, focus on building machines that create circuits on larger silicon wafers or that make circuits with copper instead of aluminum, to create faster chips that use less energy.
KLA-Tencor Corp will display 10 new machines this year that will help customers test smaller circuits. Teradyne, whose machines test chips after they have been made, plans to showcase at least seven tools, including its Catalyst machine.
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