Semiconductor Equipment - Berenberg Bank

ASM International NV
Small/Mid-Cap: Technology Hardware
Figure 14: ASMI is better positioned today
$mn 2008 2012 Change Market share change Comment
Deposition 252 309 23% Flat
Stayed at 5.2% deposition market
share.
PE CVD 82 44 -47% Down from 6% to 3% Lost share to LAM.
ALD 76 187 146% Up from 38% to 44%
Remain dominant, higher visibility
on market growth compared to
2008.
LP CVD 49 26 -46% Down from 5% to 3% Lost share to Hitachi
Epitaxy 45 53 17% Down from 18% to 10%
Market share down as ASMI only
focus on low growth analog and
power devices applications. It may
gain market share from AMAT with
new equipment launched which
targets logic players.
Source: Gartner data, Berenberg estimation
The market is concerned that the industry will not see memory capex expand at the
rate it did 2010. If this is correct, ASMI will lose some of its upside for PE CVD,
which is used in memory-makers. Our response, however, is that although the
memory market expanded in 2010 it has since pulled back, and PE CVD is not
ASMI’s main exposure. The focus should be on the ALD division, where it
generates the majority of its revenue.
As ASMI is in a better position today than it was in 2008, we believe the ALD and
PE CVD segment is now worth more than $400m-500m compared with 2008. In
our analysis below, the combined value of these two businesses is at least $575m
based on current FX rates. This value is 13% higher than the high end of the
AMAT and Francisco Partners offer, and is worth 41% more than the high-end of
that offer once the June 2008 FX rate is factored in.
Figure 15: ALD and PE CVD worth more today
Amount
Comment
Price offered in 2008 June $mn 400-500 for ALD, PECVD business
ALD, PECVD % of revenue in 2012 $mn 74% As per Gartner data
2013 group revenue €mn 398 Berenberg estimate
2013 ALD, PECVD revenue 2013 €mn 295 Assume 74% from ALD and PECVD
Value @1.5x sales €mn 442 In line with 2008 June valuation
@FX rate today €/$1.3 $mn 575 15% higher than top end $500mn offer
@FX rate 2008 June €/$1.6 $mn 707 41% higher than top end $500mn offer
Source: Berenberg estimation, Bloomberg for FX
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