*AV*--Out on a Limb Vance, here. The announcement makes a great deal of sense. The target is the seemingly dominant position of AMAT which internally has both the deposition and etching of these advanced layers and films. This "package deal" for both euipment and process is a tough situation for competitors. Therfore, this alliance between LRCX and NVLS not only makes sense but it is the only way to really address the issue.
What I find interesting is that AMAT, LRCX, and NVLS are probably 3 companies that can be spoken of in the same breath even though the equation should read: LRCX + NVLS < AMAT
When you consider the product offering of AMAT and how it is moving forward in a manner that would allow them to provide a turn key IC manufacturing equipment set to the market, you see that the equality statement should be more like: AMAT = LRCX + NVLS + KLAC + SFAM
Can I see this happening down the road. Yes, I can. I seriously think that with LRCX entering a relationship with Strasbaugh CMP, NVLS may be tempted to look very closely at aligning itself with the likes of a SFAM or IPEC. SFAM seems to be the stronger of the two. I also see LRCX taking some very necessary restructuring of their business by "cleaning house" of some business units. Its almost as though they are trying to set the stage for something down the road. I also see both NVLS and LRCX management able to act in concert with each other on a common set of goals: Loosening the industry and SEMATECH reliance on AMAT as the solution to all their needs and to combat the oppressive dominance of AMAT in the market. Both companies consider AMAT a threat to their survival.
Be that as it may, sometime soon there will be another round of consolidations and the combined resources of LRCX, NVLS, KLAC, and SFAM could create an entity that could become a viable alternative to AMAT.
While a poor example, UTEK's acquisition of privately owned ISI Corp. moves UTEK onto the same playing field as Canon, Nikon, SVGL, and ASMLF. All they have to do is overcome the market acceptance and perception issues along with providing a sound production worthy product. If successful, there are reasons to believe UTEK could leapfrog some of their competitors.
The same holds true for the LRCX/NVLS alliance. Hopefully it leads to a more fruitful situation.
Andrew |
