Merger mania coming to the chip equipment sector? The following from a Reuters article. Jeff
<<
Mergers also are heating up in the downtrodden $22 billion semiconductor equipment industry, which makes the million dollar equipment used by chip makers around the world.
Chip equipment firms are slowly turning around, with forecasts that revenues will be flat this year after dropping last year. The industry slump came amid economic woes in parts of Asia, home to many big customers.
Barry Newman, senior managing director of NationsBanc Montgomery Securities, said he had been predicting consolidation in the equipment industry for a few years, but this year will be one for more mergers in chip equipment, as companies recover from the worldwide industry slowdown.
''We are in an environment where people are thinking about them,'' said Newman, who heads up NationsBanc Montgomery's technology investment banking.
Another factor driving equipment companies to merge is competition with the world's largest equipment maker Applied Materials Inc., which offers entire solutions to many steps involved in the complex 12-sequence chip manufacturing process, while most equipment makers offer one or two products at the most, SG Cowen & Co. analyst Min Pang said.
''There were 29 deals in this space last year and there are already 12 this year (through February),'' Pang said. ''It's incredible. It's not very visible because these are not very large companies. But these things are already happening.''
>> |
