AMAT set for more acquisitions, per Mr. Morgan and Bloomberg. Jeff
Applied Materials Plans More Acquisitions in Effort to Pick Up Technology
By Erik Schatzker
Applied Materials Plans More Acquisitions to Gain Technology
San Francisco, July 13 (Bloomberg) -- Applied Materials
Inc., the biggest maker of equipment for the semiconductor
industry, plans to acquire more companies to gain technology it
doesn't have, Chief Executive Jim Morgan said.
Targets will include manufacturers whose equipment checks
semiconductors for defects and others with tools used to
electrically charge the silicon wafers that become chips. Morgan
said the companies likely will be small with few or no sales.
Applied is accelerating its acquisition pace as customers
demand new products to make chips more powerful. Rather than
develop the necessary technology in-house, Morgan said he's now
willing to pay to gain share in markets where Applied isn't the
No. 1 company.
''As our customers outsource more of their problems, we're
looking for ways to provide solutions for them,'' Morgan said in
an interview at the Semicon West trade show. ''If we don't have
it in house, we'll bring it in from the outside.''
Applied has employed the strategy before. It broke into the
chip-inspection business with the purchase in 1996 of two Israeli
companies, Opal Inc. and Orbot Instrument Inc. That put Applied
into direct competition with KLA-Tencor Corp. and Hitachi Ltd.
Last year, Applied bought Consilium Inc., a software maker,
and in May it agreed to acquire Obsidian Inc. to gain a chip-
polishing system it didn't have.
Morgan still has his sights set on KLA-Tencor and Hitachi,
the leaders in chip inspection and process diagnostics. In
electrical charging, a process known as ion implantation, he's
taking on Eaton Corp. and Varian Semiconductor Equipment
Associates Inc.
''Those are the areas where we're weakest, so we'll try to
beef them up,'' Morgan said.
Morgan declined to say how many companies Applied is looking
at or when it could make the next acquisition. He did say that it
also may buy minority stakes in companies, as with Triant
Technologies Inc. last month.
To make the investments, Applied could use some of its more
than $2 billion in cash, or stock. Its shares, which fell 1 1/8
to 73 yesterday, have risen 71 percent this year.
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