Semiconductor Equipment - Berenberg Bank

More documents

Recommendations

Info

Applied Materials Inc Technology Hardware gain through silicon etching expansion – although if it wants a greater share, it will have to gain it from competitors. This will be difficult as: 1) each of the major equipment vendors already has an established relationship with one/all of the main chip-makers; 2) the etching market is expected to be driven by 3D NAND, which is an area in which AMAT may benefit less than LAM as it has lower memory exposure. AMAT estimated its NAND sales addressable market (SAM) would expand by 25% to 35%, versus LAM’s expectation of 35-55%; 3) the growing complexity of the technology is making it more difficult for companies to compete through product innovation; and 4) the market has always been competitive. In the etching market, LAM has recently indicated that it is aiming to gain a 3-5% market share by 2015/2016. TEL is aiming to increase its etching share from 29% to 35% by 2015. As a result, we believe AMAT will only gain an extra 1% share, which is less than 1% WFE share gain (LAM estimates that the etching market is 12-14% of total WFE). Figure 4: AMAT may gain a 1% etching share as the market shifts $mn 2,012 2016E Share Change Etching market 4,060 4,291 LAM 42% 45% 3% AMAT 9% 10% 1% TEL 35% 32% -3% hitachi 8% 9% 1% of which Silicon etching 1920 2326 up c 5% LAM 1,132 1,371 Hitachi 303 367 AMAT 264 320 TEL 174 210 of which Dielectric etching 1,968 1,855 down c1% TEL 1,234 1,163 LAM 511 482 AMAT 101 95 of which Metal etching 98 110 up c3% LAM 76 85 AMAT 14 15 Hitachi 8 9 Source: Gartner data, <strong>Berenberg</strong> estimates Process control – we expect AMAT to gain maximum 5% share AMAT has been trying to gain a process control market share from KLA since 2008/2009 but with limited success. In May 2013, it noted an inspection share gain at both the foundry and logic level, which partly explains KLA’s weak result last quarter. KLA guided 8% below consensus, and its wafer inspection booking for Q1 2013 was 20% lower than the peak booking quarter. In our opinion, AMAT may further gain some share in the process control market, given that the new president Gary Dickerson is experienced in process control market (18 years at KLA) and has a good execution track record. However, we believe AMAT will only achieve a maximum market share of 15%, which was its peak level between 2009 to 2012, and will only gain a 5% process control market share (1% of WFE), because: 1) it is a strong player in the defect review market (with a 60% share) – however, the defect review market only amounts to 6% of the total process control market, hence it will not in itself be sufficient to drive significant growth; 98
Applied Materials Inc Technology Hardware 2) AMAT lags KLA in terms of technology and experience – it lost 7% of defect review market share to KLA in 2012 (see Figure 5) as KLA’s new tool allows it to identify and analyse 15nm defects which cannot be found by AMAT’s tool; 3) KLA is well established with the main capex spenders such as Intel, TSMC, Samsung, Globalfoundries, SK Hynix, Micro/Elpida and Toshiba/Sandisk – AMAT’s relationship with these companies does not give it a competitive advantage over KLA. Figure 5: AMAT’s process control share fell by 2% in 2012 2012 2012 REV 2012 mkt share % 2011 mkt share % Market size AMAT KLA AMAT KLA AMAT KLA CD-SEM 533 52 0 9.7% 0.0% 14.0% 0.0% Mask Inspection/Review 489 66 332 13.5% 67.8% 21.6% 65.3% Optical Patterned Wafer Inspec 1,393 194 1,159 13.9% 83.2% 12.2% 84.5% SEM Defect Review and Classif 234 156 54 66.6% 23.0% 73.4% 10.9% Other Defect Review and Classi 6 0 0 0.0% 0.0% 0.0% 0.0% AMAT&KLA common mkt 2,656 467 1,545 17.6% 58.2% 20.1% 59.2% Other markets 1,760 842 47.8% 47.8% Total Process Control 4,416 467 2,387 10.6% 54.1% 12.1% 54.7% Source: Gartner data We do not believe AMAT will gain share through M&A Historically, AMAT used to gain market share through acquisition – ie it acquired Varian in 2011 to obtain ion implant market exposure (Varian had a 75% share of Ion implant market). However, we do not think AMAT will expand through acquisition in the etching and process control segments: 1) judging by its Varian acquisition, we believe AMAT is only interested in market leaders, therefore it may only be interested in LAM, KLA and TEL in etching and process control markets (see Figures 6 and 7 below); 2) we do not think AMAT will acquire LAM or KLA as we do not expect it will want to further stretch its balance sheet; 3) we do not think AMAT will buy TEL as the latter is mainly exposed to declining dielectric market. Figure 6: The etching market is already largely consolidated 100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Source: Gartner data 2012 2011 2010 LAM Hitachi AMAT TEL Mattson Others 99
Page 1 and 2:
BERENBERG EQUITY RESEARCH Semicondu
Page 3 and 4:
Table of contents Shrinkage brings
Page 5 and 6:
Semiconductor Equipment Technology
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
ASML Holding NV Technology Hardware
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48: ASML Holding NV Technology Hardware
Page 53 and 54: ASM International NV Small/Mid-Cap:
Page 75 and 76: Suess Microtec AG Small/Mid-Cap: Te
Page 93 and 94: Applied Materials Inc Technology Ha
Page 97: Applied Materials Inc Technology Ha
Page 117 and 118: Tokyo Electron Ltd Technology Hardw
Page 137 and 138: Semiconductor Equipment Technology
Page 139 and 140: Semiconductor Equipment Technology
show all

Semiconductor Equipment - Berenberg Bank

Create successful ePaper yourself

Delete template?

Save as template?