It is almost the oldest story in electronics: Surging demand in the consumer electronics world outstrips the capacity of memory chip companies to meet orders. Delivery times slip, and desperate customers start placing multiple orders, sometimes with the same supplier. The chip companies do their best to stop this practice — which used to throw the semiconductor companies into overnight recessions in the 60s, 70s and 80s — but they are never entirely successful. As a result, as the latest boom heats up, memory makers find themselves ramping up manufacturing for a demand level that, to some degree, is illusory. How much? They only find out when the latest consumer boom slows and demand first levels off and then slumps. Suddenly, that one order, when cancelled, turns into three or four . . .and suddenly demand is in freefall.LinkThat’s what has just happened to memory companies like Micron Technologies — and they in turn have responded by cutting their current expansion plans. And what that means, in turn, is that they have also cancelled their orders for the equipment that was supposed to go into those now-cancelled fabs. Equipment that was supposed to be built by companies like Applied Materials.In case you’ve never noticed, semiconductor equipment is one of the strangest businesses in all of tech. Most of these firms have only a few dozen customers, such as Intel, and as such are more at the mercy of the up-and-down cycles of tech than any other industry. The vicious nature of this radical boom-and-bust world is often fatal to many semi companies. That’s what made the twenty year success of Applied Materials under Jim Morgan one of the most admired examples of corporate management in American business.But Morgan has retired, and Applied is no longer the company it once was. And right now it is looking a lot like every other semi equipment company. Faced with slumping demand, the company yesterday announced that its third-quarter net income fell 65 percent to $164.8 million, or 12 cents a share, from $473.5 million, or 34 cents, a year earlier. Sales, meanwhile, slumped 28 percent to $1.85 billion in the three months ended July 27.Numbers like that would put most companies in a tailspin. But this is semi equipment after all, where crises, if not fatal, are usually followed by epiphanies. Certainly the stock market has learned to be patient when dealing with these companies: following the bad news, Applied’s stock rose 1 cent to 18.47.