July 26 (Bloomberg) -- ASM Pacific Technology Ltd., the world’s biggest maker of chip-assembly and packaging equipment, will likely cut its capital expenditure as Europe’s debt crisis crimps demand.
“It’s very likely that our annual capital expenditure will not meet our budget,” Lee Wai Kwong, chief executive officer of the Hong Kong-based company, said at a press conference today. “Because the euro debt crisis is so uncertain, we’ll also be more cautious with our financial management.”
The manufacturer has forecast spending of $101.3 million this year, down 2 percent from actual investment in 2011, according to its annual report released in March. That would be the lowest spending since $14.2 million in 2009, the document shows.
Chip manufacturers are facing weakening demand amid a global economic slowdown. Intel Corp., the world’s largest semiconductor maker, scaled back its annual sales forecast this month as demand for personal computers fails to rebound in Europe and the U.S. STMicroelectronics NV, Europe’s largest chipmaker, also announced a 25 percent cut in capital expenditure for the year this week.
ASM Pacific’s second-quarter sales fell 26 percent to HK$2.93 billion ($378 million) from the same period last year, according to earnings published today. Net income dropped 60 percent to HK$310 million.
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