Applied Materials Inc., the world's biggest supplier of tools used to make microchips, on Tuesday introduced an upgraded line of etching equipment aimed at fast-growing consumer electronics markets.

The new etch line will allow memory chip producers to build flash memories that, for example, would allow Apple Computer Inc. to quadruple capacity of its one gigabyte iPod that can now store 240 to 300 songs, an Applied official said.

At a meeting with Wall Street analysts and investors on Tuesday, the company showcased the new silicon etch systems targeted at makers of flash memories used in mobile phones and digital music players, a key growth market for Applied Materials.

The circuit-etching systems and a strategic pact with General Electric Co. in which GE will finance equipment purchases by Applied Materials customers are part of a drive by Applied to stoke growth amid a cyclical decline in its sales.

Applied Materials' sales for the second quarter ended in April declined 7.7 percent from a year ago to $1.86 billion. Wall Street analysts project Applied's sales will fall 26 percent in the current quarter and 24 percent in the quarter ending in October. Modest year-to-year growth is not projected until early in 2006.

"We expect to continue to propel Moore's Law forward by focusing on the flash memory market," said Ashok Sinha, senior vice president in charge of Applied's etch product unit. "The number of transistors is doubling every year," he said.

Moore's Law refers to the 1965 prediction by Intel Corp. co-founder Gordon Moore that computing power can increase exponentially into the foreseeable future as the number of circuits that fits on a chip doubles every one to two years.

FINDING NEW GROWTH MARKETS

The upgraded line of etch equipment, which expands the usable area of silicon wafers aims to boost Applied's share of a segment where it ranks No. 3 behind bigger players Lam Research Corp. and Tokyo Electron Ltd.

Flash memory, which is used to store data in consumer electronics ranging from mobile phones to the latest digital music players, has emerged as the new driver of technology advance in microchips.

Computer memory chips called Dynamic Random Access Memories (DRAM) had driven the advance of Moore's Law for more than 30 years, but consumer-oriented flash memory is now propelling the industry toward every more microscopic technology, Sinha said... (Continued Here)

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