In a surprise announcement, chip equipment leader
, led for 26 years by James Morgan, has recruited a new CEO from
Effective immediately, the company will be headed by Michael Splinter, most recently director of sales and marketing at Intel, where he spent nearly 20 years.
Besides the CEO title, Splinter will assume the role of president, succeeding Dan Maydan.
Morgan will continue in his post as chairman of the board of directors, while Maydan will be president emeritus and remain a member of the board.
Explaining the timing of the handover, Morgan said on a conference call, "We wanted a management team in place before business picked up so we would have the opportunity to build credibility with you
Wall Street analysts and other people."
As an Intel alum, Splinter should be well-versed in the demands facing AMAT, the world's largest vendor of chip-making equipment. Intel, the world's biggest capital spender on chip-making equipment, has lately been trimming its budget. For 2003, Intel expects capital spending to be between $3.5 billion and $3.9 billion, down from $4.7 billion in 2002.
Splinter said the big focus of his new job will be "how to get AMAT back to growth and how to grow within a market that is pretty difficult at this point in time."
Asked by an analyst to comment on the state of end-market demand, Splinter said, "Traffic on the Net is doubling every year, even in this downturn. I don't see any abatement of that. Semiconductors move all that information, and Applied is the heart and soul of the operations that make those semiconductors."
Analysts said a management transition had been expected, though the exact timing was somewhat of a surprise. "I would argue it's a net positive to bring in somebody from a leading customer," said Morgan Stanley analyst Steve Pelayo, characterizing Splinter as "a high-caliber guy." "While Applied has a very good market share, it opens up the opportunity to increase that share further. I don't see the downside here."
He added it would be a mistake to think Morgan was being ushered out. "Morgan has done a phenomenal job, and he's staying involved. If anything, I would argue this just added more brain talent."
That will be needed, since AMAT has struggled amid a weak market. In November, it announced a layoff of 11% of staff, leaving it with a payroll of around 14,000.