SAN FRANCISCO -- Speaking at the BancBoston Robertson Stephens Tech Conference, Applied Materials (AMAT) - Get Report CFO Joseph Bronson said he sees the possibility of semiconductor demand exceeding production capacity by about 5% in the year 2000.

"We haven't seen this since 1994," he said. "We are watching this very carefully. This is a very key thing."

Undercapacity in the semiconductor industry means that chipmakers have to spend money for new equipment and production facilities. Applied Materials is considered the bellwether of the semiconductor-equipment sector.

Bronson also said the company is striving toward new levels of profitability, shooting for a 50% gross margin, which is something the company has never done. Last quarter, the gross margin was 48.1%. He added that some business units are achieving even better gross margins.

The semiconductor-equipment market has been in a slump for more than a year because chip companies have not been spending significantly on new equipment or manufacturing plants.

-- Marcy Burstiner

The tech sector has given in to the interest rate concerns that are keeping stocks under pressure today.

Yield on the long bond was recently at 5.63% vs. around 5.50% late Wednesday on continued fears that the next move by the

Fed

will be an increase in interest rates. And many of the tech bellwethers have been dragged lower along with the rest of the market.

Intel

(INTC) - Get Report

was trading 4 3/8 lower, or 3.36%, at 126. Its recent high was 143 11/16, made Jan 20.

Microsoft

(MSFT) - Get Report

has been down for much of the month because of its ongoing trial with the government. It was down 2 1/2, or 1.64%, at 150 3/8 or more than 25 points from its 175 15/16 price on Feb. 1. And

America Online

(AOL)

was down 2 1/2 at 85 1/16. It traded as high as 91 13/16 on Tuesday following a 2-for-1 split.

Earnings Update

JB Oxford Holdings

(JBOH)

has weighed in with fourth-quarter earnings that it claims were aided by online trading revenue. JB Oxford reported earnings of 8 cents per share compared with a loss of 5 cents from the previous year.

In a press release, the company notes that strong growth in the discount- and online-brokerage segments is driving revenue expansion and increasing profitability.

Also on the earnings front,

Lycos

(LCOS)

is expected to report earnings after the close of trading. The company is expected to report an earnings loss of 4 cents a share, according to

First Call

. On Friday, Lycos is scheduled to discuss its planned merger with

USA Networks

(USAI) - Get Report

.

Ahead of the earnings report, Lycos was trading 1 1/4 lower, or 1.4%, at 89 1/4.

Software Slippage

Losses in

BMC Software

(BMCS)

also have impacted

Boole & Babbage

(BOOL)

.

BMC Software was down 6 points, or 13%, at 41 after the company restated its

earnings. Boole & Babbage also was off 4 points, or 13%, at 27 3/8.