Semiconductor Equipment - Berenberg Bank

Applied Materials Inc
Technology Hardware
Compared to other major semiconductor equipment companies, AMAT has the
broadest product portfolio, used in different chip fabrication processes (see Figure
27).
Figure 27: product portfolio of equipment vendors
Semiconductor Equipment AMAT LAM ASMI ASML TEL KLA
Lithography
Y
Photoresist Processing (Track)
Y
Deposition Y Y Y Y
Etch, Clean, and Planarization Y Y Y
RTP and Oxidation/Diffusion Y Y Y
Ion Implanter
Y
Process Control Y Y
Manufacturing Automation and Control Y
Wafer-Level Packaging Y Y Y Y
Die-Level Manufacturing Equipment Y Y
Test Equipment
Source: Company data
Acquisitions
AMAT has been active in M&A during the past decade, acquiring Varian in 2011
and Semitool in 2009 – and although it attempted to acquire ASMI in 2008, it was
not successful. None of the companies that AMAT has acquired in the past few
years operate in the same segments as AMAT – thus there is no overlap with
AMAT in terms of market share. All the acquired companies have a dominant
market share in their respective segments. We believe that AMAT’s strategy is to
expand its total addressable market through acquisition, and to grow organically in
the areas in which it currently has a position.
Figure 28: M&A deals
2011 Acquire
Name Amount Description Synergy for AMAT
Varian Semiconductor
Equipment Associates,
Inc
$4,900mn
- Gain exposure to ion implantation market, where it do not
Leading supplier of ion have any share before and Varian had 75% share,
implantation equipment to -Enhance AMAT's Baccini Solar product portfolio with c-Si
the semiconductor and products,
solar industries - Supply chain synergy of $50-60mn in annual cost from
end of 2nd year.
2009 Acquire Semitool Inc $346mn
2008 Rejected ASM International $800mn
Supply equipment used in
chip packaging
Semiconductor equipment
vendor specialised in
ALD deposition tool
-Get exposure to advanced packaging and memory
industry's conversion to copper interconnect.
- Enhance its deposition product portfolio further,
- Benefit from ASMI's comprehensive IP portfolio on
ALD equipment.
Source: Company data, Berenberg, Bloomberg data
AMAT shareholder structure
AMAT has approximately 1,203m outstanding ordinary shares listed on the
NASDAQ stock exchange. The free-float percentage is 99%. The shareholder
structure in June 2013 is shown below.
113