Latest from RS on AMAT:
Applied Materials, Inc.
NASDAQ: AMAT $49.31
Strong Buy
Sue Billat, Semiconductor Equipment/Foundries
“Last Thursday, Applied Materials held an analyst conference to provide an update on its product positioning in key emerging trends such as the transition to smaller feature sizes, conversion to copper processing tools, and the move to 300-mm wafers,” said Billat. “Although near term visibility is poor, the rate of bookings deceleration has slowed, we believe. Applied reiterated its commitment to invest in R&D in order to strengthen its position in the next upcycle. Copper interconnect related products will grow at a CAGR of 45% and outperform the overall equipment market’s 17% growth rate, according to Dataquest, as these tools address vital issues in the transition to feature sizes below 0.18 micron. We believe that these opportunities bode well for Applied and Novellus as well as for Rudolph Technologies and Cabot Microelectronics. In the fabrication of next generation devices at feature sizes below 0.15 micron, we believe transistor-creating steps such as implantation and thermal processes will become increasingly critical. We believe these tools are likely to use single wafer processing. While Applied does not offer 300-mm furnaces, it does have a strong market share in rapid thermal processing (RTP). Applied stands to increase its overall share in thermal processing as single wafer RTP and low pressure CVD (LPCVD) supplant furnace operations at 300 mm. In our view, Applied Materials has established a track record of focussing on research and development during downturns and emerging stronger at the end of it. With its strong product positioning in copper interconnect tools and next generation transistor modules, we believe Applied is well positioned to continue the winning streak. Accordingly, we reiterate our Strong Buy rating on AMAT.” |
