Applied Materials, Inc. (NASDAQ:AMAT), with -1.54% losses in previous 5 sessions, is under coverage of 23 analysts who collectively assign a buy rating on stock. 21 of the brokerages firms have a buy or better rating; the 0 sells versus 0 underperforms. The 21 stock analysts who cover the stock have an average PT at $33.5, with individual targets in the range of $25 to $39. The shares ended last trade at $28.22, implying that Wall Street analysts see shares climbing about 18.71 per cent in 12 months’ time.
Insiders at the company look pessimistic about the outlook as they seem to offload shares while they have 53.16 jumped so far this year. A President and CEO at Applied Materials, Inc. (AMAT) sold shares in a trading activity completed on Friday October 07, 2016. Dickerson Gary E offloaded 229,935 shares in the company at a per-share price of $29.71 and ended up generating $6,831,370 in proceeds. Dickerson Gary E retains 1,563,777 shares in the stock after this transaction. A Senior VP, CTO in the company, Nalamasu Omkaram, on Thursday September 01, 2016 collected $2,999,650 from the sale of 99,491 shares at a per-share price of $29.71. Insiders are expected to have better knowledge about the health and prospects of their company, which is why insiders’ move deserves attention.
Investors interested in trading AMAT stock at the current market price of $28.22/share should know the company will next release quarterly results for the October 2016 quarter. For the reporting quarter, equity analysts expect the stock to deliver $0.65 in earnings per share (EPS). That would represent a 124.14 per cent year-over-year increase. Revenue for the same quarter is predicted to arrive at $3.31B.
Historical Quarterly Earnings: Last quarter, Applied Materials, Inc. generated nearly $2.82B in sales and net income of $0.5/share. That compares with the mean forecast $2.84B and $0.48/share, respectively. For the prior quarter revenue for the stock hit $2.45B, with EPS at $0.34.
Susquehanna is following shares of Applied Materials, Inc. (AMAT), so its rating change is noteworthy. The company stock was upgraded to Neutral from Negative, wrote analysts at Susquehanna, in a research note issued to clients on Tuesday June 28, 2016. There was another key research note provided by DA Davidson on Monday June 27, 2016. The firm lifted its rating on AMAT from Neutral to Buy.
Price Potential: Even though the stock has posted -0.18% fall in value, its new closing price reflects a -9.17% fall in value from company’s one year high of $31.07. The stock is currently holding below its 50-day SMA of $29.16 and above its 200-day SMA of $25.98. Over the last 3 months and over the last 6 months, the shares of Applied Materials, Inc. (AMAT), have changed 5.54% and 42.99%, respectively.
Resources: reviewfortune.com
Showing posts with label AMAT. Show all posts
Showing posts with label AMAT. Show all posts
Applied Materials Or Lam Research: Which Is The Better Stock?
The semiconductor equipment segment has seen quite a bit of consolidation such that today there are just a handful of companies worth looking at. But this has led to some really big players such that further consolidation may be difficult due to anti-trust hurdles.
Earlier, Applied Material’s (AMAT) proposed acquisition of Tokyo Electron fell through on anti-competitive concerns and now there is a possibility that similar issues in China, Japan and Korea will work against the Lam Research.
Here is a brief analysis of the two market leaders in the backdrop of shrinking process nodes, 3D NAND production ramp up and an emerging Chinese semiconductor sector.
Applied Materials remains the market leader in wafer level manufacturing equipment according to Gartner with a 19.1% share. The company has been the market leader for as far back as I can remember and it continues to take share (growing 1.3% in a market that shrank 1.0% in 2015).
But Lam Research has seen more remarkable growth of 24.7% in 2015 to end the year with a 14.3% share of the market. Lam has grown through acquisitions, most notably that of Novellus Systems in Jun 2012.
Unlike other markets, semi equipment includes lighting sources, process control equipment and other things with companies specializing in specific areas, so Gartner’s top 10 aren’t always directly comparable and share gains aren’t necessarily indicative of competitive strength.
The two major technology inflections driving semiconductor engineering at the moment are shrinking process nodes and 3D NAND. Major design breakthroughs and innovations are very positive for equipment makers in particular because they involve increased complexities that can only be taken care of with new, specialized equipment.
Shrinking process nodes: Very simplistically, the CMOS manufacturing process for semiconductors involves the deposition of several layers of conductive and semiconductive materials on a silicon wafer and using laser light sources (now moving to extreme ultra violet or EUV) to implant the material in specific designs using stencil-like things called photomasks or reticles. The excess material on the surface of each layer is then cleaned or “etched” away using liquid or gaseous materials. What follows is a process of planarization, cutting, sorting and packaging the final wafers into “chips”. So when these chips become smaller in size, each wafer yields more, leading to cost efficiencies. Increasing wafer sizes also does the same thing because the number of chips per wafer increases but this can involve more capital because new capacity or significant upgrade of existing capacity may be required. Moreover, the need to shrink is leading to materials innovation IBM announced carbon nanotubes) because of the limitations of using silicon at the wafer level. The bottom line is, semiconductor manufacturers are therefore keen on shrinking chip size or increasing wafer size and every time this happens, they will buy fresh equipment first for designing, and then for volume production and to manage yields.
3D: As chip sizes shrink, there is the increased risk of electrostatic discharge, impacting yields and functionality. Semiconductor designing has therefore moved to three dimensional designs, thereby enabling both functionality and electrical stability in smaller areas. This again is leading to increased demand for new manufacturing equipment.
Applied Materials recently announced that it has started shipping its PROVision ebeam inspection tool offering down to 1nm resolution inspection for foundry, logic, DRAM and 3D NAND customers.
The company hasn’t specified the number of machines sold to date but said that it was more than 12, that two important foundry and memory manufacturers have taken delivery and that orders at existing and new customers had been received. Last year, it launched the Centura Tetra Z for etching at 10nm and below and announced earlier this year that its Selectra etching tool for design and manufacture of 3D logic and memory chips was shipping to foundry logic and memory chipmakers.
As far as Lam is concerned, the company recognizes that yield management in the more complex new processes will be linked to deposition and etch as materials used in these processes impact resistance and stress, which also affect yields. So it is trying to buy KLA-Tencor, which has historically led in process control and yield management equipment to integrate these functions in its equipment. As part of its Altus product line, the company announced that its new atomic layer deposition tool facilitating chip shrinking was already in use at several R&D sites as well as at leading 3D NAND and DRAM players. The company is particularly well positioned at memory manufacturers.
Given China’s growing importance in chip consumption and production, it is an important market for equipment suppliers. The Chinese government is aiming to domestically manufacture 40% of domestic consumption in the next five years. But while the government is doing all it can to grow the Chinese semiconductor segment, demand continues to outpace the output from these efforts. So the government is welcoming foreign players to fill the gap. For equipment suppliers this is positive because while it will try to rely on domestic companies as much as possible and even buy up U.S. technology, it will continue to buy equipment from international players as well.
Applied Materials has for long been a major player in China, so it has important relationships and regular business from the region. China revenue has continued to grow in the last few years although the rate of growth appears to be slowing down. This could be because of the Chinese government’s efforts or increased competition with Lam Research. It still accounts for around 17% of this market.
Lam Research will see increasing strength in China as both Intel’s Dalian fab and the Chinese company XMC (which has licensed 3D NAND technology from Cypress-owned Spansion) ramp up spending. Of these, Intel is in the tooling phase for 3D NAND, so its impact will be immediate. On the other hand, XMC just started construction, so equipping will likely be in 2017.
However, real gains for these leading equipment makers come from market share wrested from each other or if the market itself expands as a result of new semiconductor applications. That’s because even if manufacturing changes location (to China for instance), but chip volumes (and therefore capacity) doesn’t increase, there is no change in equipment demand. Market expansion will likely become the most important factor over time, as growth in the Chinese semiconductor sector means gradual and growing competition from newer Chinese players that the current market leaders will increasingly be pitted against. Most of the Chinese fabs are trailing edge, so upgrading to leading edge will also be a driver.
Resources: zacks.com
Earlier, Applied Material’s (AMAT) proposed acquisition of Tokyo Electron fell through on anti-competitive concerns and now there is a possibility that similar issues in China, Japan and Korea will work against the Lam Research.
Here is a brief analysis of the two market leaders in the backdrop of shrinking process nodes, 3D NAND production ramp up and an emerging Chinese semiconductor sector.
Applied Materials remains the market leader in wafer level manufacturing equipment according to Gartner with a 19.1% share. The company has been the market leader for as far back as I can remember and it continues to take share (growing 1.3% in a market that shrank 1.0% in 2015).
But Lam Research has seen more remarkable growth of 24.7% in 2015 to end the year with a 14.3% share of the market. Lam has grown through acquisitions, most notably that of Novellus Systems in Jun 2012.
Unlike other markets, semi equipment includes lighting sources, process control equipment and other things with companies specializing in specific areas, so Gartner’s top 10 aren’t always directly comparable and share gains aren’t necessarily indicative of competitive strength.
The two major technology inflections driving semiconductor engineering at the moment are shrinking process nodes and 3D NAND. Major design breakthroughs and innovations are very positive for equipment makers in particular because they involve increased complexities that can only be taken care of with new, specialized equipment.
Shrinking process nodes: Very simplistically, the CMOS manufacturing process for semiconductors involves the deposition of several layers of conductive and semiconductive materials on a silicon wafer and using laser light sources (now moving to extreme ultra violet or EUV) to implant the material in specific designs using stencil-like things called photomasks or reticles. The excess material on the surface of each layer is then cleaned or “etched” away using liquid or gaseous materials. What follows is a process of planarization, cutting, sorting and packaging the final wafers into “chips”. So when these chips become smaller in size, each wafer yields more, leading to cost efficiencies. Increasing wafer sizes also does the same thing because the number of chips per wafer increases but this can involve more capital because new capacity or significant upgrade of existing capacity may be required. Moreover, the need to shrink is leading to materials innovation IBM announced carbon nanotubes) because of the limitations of using silicon at the wafer level. The bottom line is, semiconductor manufacturers are therefore keen on shrinking chip size or increasing wafer size and every time this happens, they will buy fresh equipment first for designing, and then for volume production and to manage yields.
3D: As chip sizes shrink, there is the increased risk of electrostatic discharge, impacting yields and functionality. Semiconductor designing has therefore moved to three dimensional designs, thereby enabling both functionality and electrical stability in smaller areas. This again is leading to increased demand for new manufacturing equipment.
Applied Materials recently announced that it has started shipping its PROVision ebeam inspection tool offering down to 1nm resolution inspection for foundry, logic, DRAM and 3D NAND customers.
The company hasn’t specified the number of machines sold to date but said that it was more than 12, that two important foundry and memory manufacturers have taken delivery and that orders at existing and new customers had been received. Last year, it launched the Centura Tetra Z for etching at 10nm and below and announced earlier this year that its Selectra etching tool for design and manufacture of 3D logic and memory chips was shipping to foundry logic and memory chipmakers.
As far as Lam is concerned, the company recognizes that yield management in the more complex new processes will be linked to deposition and etch as materials used in these processes impact resistance and stress, which also affect yields. So it is trying to buy KLA-Tencor, which has historically led in process control and yield management equipment to integrate these functions in its equipment. As part of its Altus product line, the company announced that its new atomic layer deposition tool facilitating chip shrinking was already in use at several R&D sites as well as at leading 3D NAND and DRAM players. The company is particularly well positioned at memory manufacturers.
Given China’s growing importance in chip consumption and production, it is an important market for equipment suppliers. The Chinese government is aiming to domestically manufacture 40% of domestic consumption in the next five years. But while the government is doing all it can to grow the Chinese semiconductor segment, demand continues to outpace the output from these efforts. So the government is welcoming foreign players to fill the gap. For equipment suppliers this is positive because while it will try to rely on domestic companies as much as possible and even buy up U.S. technology, it will continue to buy equipment from international players as well.
Applied Materials has for long been a major player in China, so it has important relationships and regular business from the region. China revenue has continued to grow in the last few years although the rate of growth appears to be slowing down. This could be because of the Chinese government’s efforts or increased competition with Lam Research. It still accounts for around 17% of this market.
Lam Research will see increasing strength in China as both Intel’s Dalian fab and the Chinese company XMC (which has licensed 3D NAND technology from Cypress-owned Spansion) ramp up spending. Of these, Intel is in the tooling phase for 3D NAND, so its impact will be immediate. On the other hand, XMC just started construction, so equipping will likely be in 2017.
However, real gains for these leading equipment makers come from market share wrested from each other or if the market itself expands as a result of new semiconductor applications. That’s because even if manufacturing changes location (to China for instance), but chip volumes (and therefore capacity) doesn’t increase, there is no change in equipment demand. Market expansion will likely become the most important factor over time, as growth in the Chinese semiconductor sector means gradual and growing competition from newer Chinese players that the current market leaders will increasingly be pitted against. Most of the Chinese fabs are trailing edge, so upgrading to leading edge will also be a driver.
Resources: zacks.com
Semiconductor Systems to Fuel AMAT’s Future Growth
Applied Materials (AMAT) dominates the SME (semiconductor manufacturing equipment) market with an average share of 14% to 16%, according to Trefis. The company supplies a wide range of materials engineering solutions that are used to manufacture almost all semiconductors and advanced displays. It has divided its business into three major segments: Semiconductor Systems, Display, and AGS (Applied Global Services).
The company earns more than 60% of its revenue from the Semiconductor Systems division, catering to a varied customer base of foundries, memory chip, and logic. It’s the company’s most profitable division, and its earnings are directly proportional to semiconductor companies’ capital spending.
Over the past two quarters, Semiconductor Systems’ segment received new orders of more than $4 billion. In these two quarters alone, there was a vast shift in demand. In fiscal 2Q16, 49% of new orders came from the Flash memory market as Samsung (SSNLF), Intel (INTC), and Micron (MU) transition to 3D-NAND. In fiscal 3Q16, 57% of new orders came from foundries, as Samsung and TSMC (TSM) transition to 10-nm (nanometer) and 7-nm nodes.
For fiscal 4Q16, AMAT expects its Silicon Systems revenue to grow 45% YoY (year-over-year) to $2.1 billion on the back of a total order book of $4.6 billion. This growth would largely be driven by NAND and Foundry markets. As seen from the above graph, these two products have increased AMAT’s total addressable market in wafer equipment from 53.5% in 2012 to more than 63% in 2016.
Over the past five years, AMAT’s product mix has shifted from logic to memory. In memory, the mix has shifted from DRAM (dynamic random access memory) to NAND. This shift came as the demand for smartphones increased.
NAND demand is expected to grow further, as IoT (Internet of Things), virtual reality, and autonomous car trends could cause a data explosion and thus boost demand for memory. Moreover, these trends would require high-performance GPUs (graphic processing units) and microprocessors to analyze this data and put it to use. All this would make NAND and foundries key growth drivers for AMAT’s Semiconductor Systems division.
Resources: marketrealist.com
The company earns more than 60% of its revenue from the Semiconductor Systems division, catering to a varied customer base of foundries, memory chip, and logic. It’s the company’s most profitable division, and its earnings are directly proportional to semiconductor companies’ capital spending.
Over the past two quarters, Semiconductor Systems’ segment received new orders of more than $4 billion. In these two quarters alone, there was a vast shift in demand. In fiscal 2Q16, 49% of new orders came from the Flash memory market as Samsung (SSNLF), Intel (INTC), and Micron (MU) transition to 3D-NAND. In fiscal 3Q16, 57% of new orders came from foundries, as Samsung and TSMC (TSM) transition to 10-nm (nanometer) and 7-nm nodes.
For fiscal 4Q16, AMAT expects its Silicon Systems revenue to grow 45% YoY (year-over-year) to $2.1 billion on the back of a total order book of $4.6 billion. This growth would largely be driven by NAND and Foundry markets. As seen from the above graph, these two products have increased AMAT’s total addressable market in wafer equipment from 53.5% in 2012 to more than 63% in 2016.
Over the past five years, AMAT’s product mix has shifted from logic to memory. In memory, the mix has shifted from DRAM (dynamic random access memory) to NAND. This shift came as the demand for smartphones increased.
NAND demand is expected to grow further, as IoT (Internet of Things), virtual reality, and autonomous car trends could cause a data explosion and thus boost demand for memory. Moreover, these trends would require high-performance GPUs (graphic processing units) and microprocessors to analyze this data and put it to use. All this would make NAND and foundries key growth drivers for AMAT’s Semiconductor Systems division.
Resources: marketrealist.com
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