Under the deal, Santa Clara-based Applied Materials will pay $28.50 a share in cash. Since Applied Films has $161 million in its own coffers, the net purchase price is $303 million.

"...an unexpected jump in volume of mobile phones predicted to ship this year was responsible for the move to allocation but that the pressure has fallen at the 0.18-micron manufacturing node..."

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Solid business results outside Japan, including robust sales of optical transmission systems in North America, outsourcing services in the UK, and hard disk drives in overseas markets, helped to offset sales declines in servers and PCs in Japan.

Renesas' sales decline exceeded the 3 percent fall it projected a year ago, which the company attributed to sluggish demand, leading to lower microcontroller sales, and eroding prices of driver LSIs for LCD panels for mobile phones.