Tokyo Electron slashes profit outlook

TOKYO, Feb 5 - Tokyo Electron Ltd, the world's No.2 supplier of equipment used to make semiconductors, reported an 82 percent fall in nine-month profit as customers cut spending, and lowered its annual outlook closer to expectations.

Tokyo Electron, which trails California-based Applied Materials Inc in the chip equipment business, reported an operating profit of 24.28 billion yen ($271.6 million) for April-December. That was down from 133.5 billion yen a year earlier as the worldwide slowdown slams the chip sector.

The supplier to Samsung Electronics Co Ltd and Intel Corp cut its annual operating profit outlook by 42 percent to 7 billion yen, close to the mean estimate of 5.3 billion yen of 18 analysts polled by Reuters Estimates.

The new forecast, which would mean a 96 percent decline from a 168.5 billion yen profit in the year ended in March 2008, represents Tokyo Electron's third outlook revision this business year.

Shrinking consumer demand is hurting chipmakers worldwide at the same time as they work to clear two years of inventories, plunging chip equipment makers such as Novellus Systems Inc into the red.

Shares in Tokyo Electron lost a third in value in the October-December quarter, in line with the 31 percent decline in the Tokyo bourse's electrical machinery index. ($1=89.39 Yen)