Applied Materials Takes On Naysayers; CEO Expecting Growth; With inventories high, analysts are predicting falling sales for Applied.(INTERNET & TECHNOLOGY)

Byline: JAMES DETAR

To all those many analysts predicting a down year for chip equipment king Applied Materials, company Chief Executive Michael Splinter has a response: Not so fast.

Splinter, hired away from Intel to take the top spot at Applied in April 2003, says it's possible his company can take enough market share to increase sales.

"We expect our share of the market to continue to grow," he said.

The consensus of 32 analysts polled by Thomson First Call is that Applied's sales for its fiscal 2005 ending in October will fall 12% from the previous year to about $70.4 billion. Analysts expect per-share earnings to fall 24% to 66 cents.

Splinter didn't give specific numbers, but he also says chip sales and gear sales overall could be better than expected. He says some "exciting" consumer electronics products could hike chip sales beyond expectations. And as chip sales go, so go chip gear sales.

"Just look at digital TVs and cell phones and the most recent example -- portable, personal iPods," he said. "They're flying off the shelf. New handheld game (players) -- they can't make enough of them. These products will use huge amounts of memory and microprocessors and have small LCD screens. It's a great opportunity."