Semiconductor Equipment - Berenberg Bank
Semiconductor Equipment - Berenberg Bank
Semiconductor Equipment - Berenberg Bank
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ASM International NV<br />
Small/Mid-Cap: Technology Hardware<br />
Figure 12: SOTP valuation<br />
ASMI SOTP valuation:<br />
ASMI's ASMPT share<br />
ASMI's holding 40%<br />
ASMP's 40% marcap (Eur mn) 1,352<br />
Valuation/ ASMI share (Eur ) 21<br />
5% holding discount 20<br />
ASMI Front end value<br />
EPS 2014 ex ASMP contribution (Eur) 0.81<br />
No. of shares (mn) 64<br />
PE<br />
14x<br />
Front end valuation (€ mn) 730<br />
Total valuation (Eur mn) 2,015<br />
Price per share (Eur) 31<br />
Source: <strong>Berenberg</strong> estimate, Bloomberg data<br />
Worth more than $800m today<br />
In 2008 June, AMAT and Francisco Partners offered to acquire ASMI’s front-end<br />
business for $800m, of which $400m-500m was assigned to the ALD and PE<br />
CVD segments. The price looked expensive due to a private equity buyout<br />
valuation premium before the financial crisis. The offer was based on roughly 1.5x<br />
total sales. The ALD and PE CVD segments contributed 47% of front-end<br />
revenue at that time, according to Gartner data. The transaction was, however,<br />
terminated because of the financial crisis.<br />
In our opinion, ASMI is in a better position today than it was in 2008. We believe<br />
it is currently worth more than $800m ($949m) (see Figure 13), while the ALD and<br />
PE CVD businesses are worth more than $400m-500m.<br />
Figure 13: Front-end business worth $800m today<br />
Amount<br />
Price offered in 2008 June $mn 800<br />
Comment<br />
Our valuation today €mn 730 Our SOTP valuation<br />
@FX rate today €/$1.3 $mn 949 18% higher than $800mn<br />
@FX rate 2008 June €/$1.6 $mn 1168 46% higher than $800mn<br />
Source: <strong>Berenberg</strong> estimate, Bloomberg data<br />
We believe ASMI is in a better position today than it was in 2008 for the following<br />
reasons.<br />
1) ASMI’s share of the ALD market has risen from 38% in 2008 to 44% today.<br />
It is unlikely to lose market share in the future as its strong IP portfolio has<br />
created a high entry barrier and TEL is not competing with ASMI in the same<br />
end-market. The visibility of ALD’s growth potential is much higher today<br />
than it was five years ago, because all mainstream logic/foundry players are<br />
adopting HKMG solutions in their advanced chip manufacturing processes.<br />
2) In 2014/2015, PE CVD growth will be fuelled by 3D NAND, which is a<br />
growth driver that did not exist in 2008. PE CVD is expected to benefit from<br />
3D NAND ramping up as the number of layers of the chip increase<br />
significantly.<br />
3) ASMI could gain logic customers through the epitaxy tool it released in 2012.<br />
This would bring extra upside.<br />
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