Updated from 11:39 a.m. EST

SAN FRANCISCO -- The misses just keep on coming from the chip sector.

Semiconductor equipment supplier Applied Materials ( AMAT - Get Report) said it will post a first-quarter loss due to charges related to the global slowdown in chip demand as well as the financial crunch felt by its customers.

Specifically, the company said it expects a loss of between 9 and 11 cents a share.

In November, the company had forecast a range of break-even to a profit of 4 cents a share. But it was at that time that Applied Materials also said it would bring about a restructuring in the first quarter to cut costs, and it's now time to pay the bill: Two-thirds of the charge to first-quarter EPS is coming from the downsizing.

The rest of the charge isn't particularly optimism-inspiring: $48 million, or 2 cent a share, for what the company calls "doubtful accounts receivable related to certain customers' deteriorating financial condition," and $20 million in inventory charges due to a decline in demand for its products.

Unfortunately, Applied doesn't believe it's done with layoffs, saying it "intends to continue implementing cost reduction programs, including shutdowns and additional restructuring activities, as appropriate for the unprecedented business conditions."

The company expects first-quarter sales of about $1.33 billion, down about 35% from the fourth quarter, and at the low end of its November forecast of a 25% to 35% dropoff in sales.

The good news, if any, for Applied is that the warning came on a day that investors seem to have some fight in them. While the session started with tech traders taking the Nasdaq to within a couple percentage points of its January lows, the index was lately struggling to stay higher, climbing 0.2% to 1480.

And so it was with shares of Applied Materials, which began the day approaching their January intraday low of $8.85, only to bounce recently a penny higher to $9.38.

As they're doing with much of the tech sector, Applied's investors are left to determine whether the disappointments coming from first-quarter profit reports warrant another trip down to test the market's Nov. 21 lows, or whether declining share prices are nearing a trough.

The Nasdaq is now off 6% in 2009, and down 10% from the end of its Santa Claus rally on Jan. 6.

Not much in the chip sector -- and certainly nothing in Applied Materials' own plans to continue cost-cutting -- indicates that semiconductor demand is picking up anytime soon.

On Monday, investors were treated to one more disappointing point of data. The Semiconductor Industry Association reported that global chip sales fell by 2.8% in 2008 -- the first year-over-year decline since 2001. What's particularly dour about the slump is how fast demand evaporated in the final few months of the year: Through August, year-to-date sales were up 5.5% over 2007.

That sort of falloff has been echoed by individual firms, with Applied Materials being no exception. Its updated first-quarter revenue projection suggests a year-over-year fall of 37% from the year before. In the company's fourth quarter, sales fell 14%.

Similarly, chip-equipment rival KLA-Tencor ( KLAC - Get Report) said last week it would slash costs and expected to post a fiscal third-quarter loss that was below Wall Street estimates. Texas Instruments ( TXN - Get Report) projected a 35% quarterly drop and plans to slash 12% of its workforce, and Altera ( ALTR - Get Report) also expects a lousy first quarter. Broadcom ( BRCM), meanwhile, missed fourth-quarter estimates by a long shot, and said first-quarter revenue would slide 22% to 27% sequentially, and Qualcomm also missed estimates and guided down.

Like the PC and cell-phone markets it supplies, the news from semiconductor companies has done little to fuel hopes that a pickup in demand is nearing. Increasingly, the best hope for investors is that this year's second quarter is less bad than the first quarter.