Semiconductor Equipment - Berenberg Bank

ASM International NV
Small/Mid-Cap: Technology Hardware
Key risks
1. Leading-edge related spending pause
The ALD tool is the main focus for ASMI, and its development was fuelled by
the industry’s adoption of the HKMG process. HKMG is essential for nodes
of 20nm and below, and the demand for this process will therefore plunge if
chip-makers suspend their investment in this most advanced chip technology.
Leading-edge chips are mainly used in consumer electronics. We do not expect
the market to slow down in the near future, as the intense level of competition
puts pressure on devices vendors to adopt such chips. However, spending may
not continue to be as high as today once emerging markets reach saturation in
2017/18 time frame.
2. Alternative technology
The ALD tool is preferred in leading-edge chip manufacturing because,
compared with CVD, it can accurately control the thickness of film layers.
However, we understand from our conversations with industry specialists that
CVD can achieve the same results as ALD if it is deposited slowly. The
growth potential for ASMI’s future top-line growth will, therefore, come
under pressure if chip-makers switch to a CVD-based process.
In our opinion, a process switch takes a long time to happen. Currently, the
HKMG process is mainly supported by ALD equipment, as CVD’s layer
uniformity is lagging behind ALD. We are therefore not concerned about it in
the next 12 to 18 months.
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