WILLOW GROVE, PA -- Additional delays in new orders for wire-bonding equipment has caused Kulicke & Soffa Industries Inc. here to reduce its projections for revenues in the current fiscal quarter, which ends Dec. 31.

The world's largest supplier of chip-assembly and packaging tools announced late Thursday evening that it now expects revenues in the quarter to be in the $140-to-$165 million range vs. $179.8 million in the same period last year. The downgrading of K&S's revenue projections is likely to renew concerns about the buildup of chip capacity--especially in the backend assembly and packaging segment.

During the summer, K&S warned investors that chip-assembly and packaging operations were pushing out orders for equipment due to a lack of processed wafers (see Aug. 3 story). That warning caused a sharp drop in stock prices of nearly all semiconductor equipment companies--even suppliers of frontend wafer-processing tools.

Late Thursday evening, K&S said customers this week had notified the company of additional push-outs of orders and new delays in bookings. "Orders for our wire bonder equipment are very volatile right now and subject to modifications," warned C. Scott Kulicke, chairman and chief executive officer of K&S. He said that additional push-outs of previously booked tools were made in addition to deferring new orders.

Some industry analysts have blamed aggressive contract chip assembly companies for getting too far ahead of demand. In Taiwan, Singapore, South Korea and elsewhere in the Asia Pacific region, contract backend manufacturing companies are attempting to gain significant market share as the chip industry expands its use of outsourced production and foundries. Unlike new wafer fabs, which take nearly two years to set up, backend assembly facilities can come online in a matter of weeks or months.

"Industry analysts continue to forecast that demand for semiconductors will increase in 2001," Kulicke noted. "While we believe the anticipated opening of new fabrication facilities will reaccelerate the demand for our backend equipment later in the year, we are monitoring the situation closely and taking the appropriate steps to manage the business in line with evolving order levels."