Semiconductor Equipment - Berenberg Bank

ASM International NV
Small/Mid-Cap: Technology Hardware
AMAT holds a dominant 89% share in the global epitaxy market (see Figure 7) and
ASMI currently holds a 9% share. ASMI only addresses the power devices and
analog markets, which are highly cyclical and low-growth (the analog market fell by
4.8% from 2011 to 2012). We do not expect it to gain significant market share
from AMAT because AMAT is already well established with logic/foundry players.
However, we believe that ASMI may be able to serve as a second supplier to Intel
after AMAT, given its strong relationship with Intel.
Figure 7: Epitaxy market share
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2008 2009 2010 2011 2012
Applied Materials ASM International
Source: Gartner data
PE CVD boost by 3D NAND
PE CVD equipment is mainly used in building interconnecting layers in the chip
manufacturing process. We believe the 3D NAND design which requires multilayer
stack deposition is likely to boost the demand for PE CVD equipment. The
roadmap of main NAND vendors shows that 3D NAND is likely to be
manufactured in volume in 2015 after ramping up at the end of 2014.
Gartner forecasts that the PE CVD market will grow by c5.4% between 2012 and
2017, versus total deposition market growth of 5.0% during the same period (see
Figure 8 below).
Figure 8: PE CVD growth versus total deposition market
$mn
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E
PE CVD Deposition PE CVD/deposition
24.0%
23.0%
22.0%
21.0%
20.0%
19.0%
18.0%
Source: Gartner data, Berenberg estimates
AMAT and LAM/Novellus are the biggest players in the PE CVD market, and we
do not expect ASMI’s market share to change significantly. However, it may still
benefit from the market’s growth in absolute revenue terms (see Figure 9).
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