Applied Materials (AMAT) President and CEO Mike Splinter responds to questions from analysts on his expectation for growth in foundries' demand:

Mike O’Brien - Bear Stearns

Maybe just give me a little more of what is going on with the foundries. I think you said foundries were going to be strong; is that across all of the foundries? Or is it just one or maybe two of them increasing spending more dramatically, while the others still have a foot on the brake?

Mike Splinter

Well, foundry spending was not particularly large in Q2. So their factories are full, or maybe in one case, still filling. We think that they have to start coming back in a bigger way in Q3. There are some signs that that is going to happen more across the board than certainly in Q2.

Mike O’Brien - Bear Stearns

That is through all the foundries? Or is it still a little bit more just one or two of them?

Mike Splinter

No, pretty much all the foundries have to make investments now as capacity is getting tight...

Stuart Muter - RBC Capital Markets

If I could sneak a quick follow-up, just on the foundries, you’ve mentioned you expect the foundries to be stronger in the second half of your fiscal year. Is that really based upon your belief that they have to spend because their utilization rates are higher, or is that based upon what they are telling you and talking about in terms of the order book that is coming through?

Mike Splinter

Some of both. It depends on the specific customer. Some are already moving their orders up and we’re seeing it in the beginning of this quarter. Others we can see the need and activity is starting to increase.

See the full earnings call transcript.

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