• Posted by: Technology Staff Editor
• In: Information Technology

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SAN JOSE, Calif. -- Amid a loss for the quarter, fab-tool vendor Kulicke & Soffa Industries Inc. has reduced its headcount by 240 positions and scrapped its annual salary increases scheduled for January.

The company--which has a grim outlook for the current quarter--also reported net revenues from continuing operations of $61.2 million for the fourth fiscal quarter, down 60 percent from a year ago and down 16 percent from the previous quarter.

It also had a net loss of $11.0 million, or minus $0.21 per share, in the quarter. This compares to a profit of $25.4 million, or $0.37 a share, a year ago.

Scott Kulicke, chairman and chief executive of K&S, painted a grim picture. ''Global economic conditions deteriorated rapidly toward the end of the September quarter, creating a very difficult business environment,'' he said in a statement.

''Customers responded quickly to the weakening economic conditions, slowing bookings toward the end of that quarter and into the current quarter. We expect demand to remain weak and visibility to be poor through at least the first half of our fiscal 2009,'' he said. ''For that reason, we expect net revenue of approximately $40 million during the first fiscal quarter of 2009.''

As a result, the company seeks to cut costs. ''To cope with this difficult environment, we are taking appropriate steps to manage costs. These measures include a headcount reduction of 240 positions and a cancellation of annual salary increases scheduled for January. We expect theses measures to cost approximately $3 million, and to result in approximately $12 million in annualized savings,'' he said.

For the fiscal year 2008, K&S net revenue from continuing operations was $328.1 million, down 11.0 percent over 2007. It incurred a net loss of $19.6 million or minus $0.37 per share, in 2008. In 2007, it posted a profit of $18.9 million.

Recently, Kulicke & Soffa Industries (Fort Washington, Penn.) acquired the assets of Orthodyne Electronics Corp., a supplier of wedge bonders. At the same time, K&S also sold its wire business unit to W.C. Heraeus GmbH, a precious metals and technology group, for $155 million in cash.

But overall, its a tough cycle in the fab-tool arena. Applied Materials Inc. said Wednesday (Nov. 12) it would reduce its global work force by 12 percent after its GAAP net income for the fiscal fourth quarter fell by more than 45 percent year-to-year, but increased 40 percent sequentially.

Axcelis, Camtek, Entegris, FSI, KLA-Tencor, Lam, Mattson, Micronic, SemiTool and other fab-tool makers have also recently announced layoffs.

With semiconductor equipment manufacturers reporting rapid declines in orders and shipments and the world experiencing a financial crisis that is projected to further cripple already waning end-user demand for chips, analysts and equipment executives are increasingly drawing parallels between the current climate and the devastating downturn of 2000-2001.