How Bad Is Semi Equipment Demand? Ask FSI International.

FSI International (FSII) is now a company that almost no one follows. But the latest results from the tiny Minneapolis-based semiconductor equipment firm offer a sobering snapshot of conditions in the industry.

For its fiscal second quarter ended February 28, FSI posted revenue of $8.6 million, which is down 60 percent–60 percent!–from the $21.4 million reported in the year-earlier quarter. That brings total first-half revenues to $20.9 million, down 52 percent from $43.9 million a year ago. For the quarter, the company lost $9.4 million, or 30 cents a share, including $2.8 million in severance costs and a $500,000 increase in its reserve for inventory obsolescence.

In a statement, CEO Don Mitchell gives the explanation you’d expect: “The global economic downturn is continuing to adversely impact credit availability, consumer confidence and technology spending,” which in turn has caused “low factory utilization levels” at most semiconductor manufacturing companies, resulting in reduced or delayed capital spending.

And despite some optimism on the Street, Mitchell does not see any early recovery. “Even though it is reported that several device producers have recently started to experience improved utilization levels, we anticipate that this situation will persist until at least early calendar 2010,” he says.

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