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Memory makes its mark on Applied Materials |
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May 16, 2007 at 05:22 PM |
Listening to the Applied Materials' Q2 results conference call was more interesting than the past few with some good nuggets of information put on the table.
Though I didn't buy into the remarks that DRAM manufacturers added capacity in line with end market demand, I did take on board that memory manufacturers made up an amazing 69 percent of the orders booked in the quarter, the highest level ever achieved for the company.
Mike Splinter said "Memory is it," and he wasn't joking!
51 percent was DRAM, while 18 percent was from flash manufacturers. Not surprisingly, Splinter noted that foundry sales are below their expectations and doubts whether foundries will spend all of their capex budgets in the year!
Splinter also acknowledged that money spent on DRAM was falling off as expected due to very aggressive spending that was front-half-year loaded. However, he did say that flash equipment orders are picking up.
Focus on memory has definitely paid off for Splinter this year and he noted that Applied is gaining market share in etch where the company has seen strong orders for dielectric etch applications. Splinter said that etch revenue growth is projected to increase by between 25 and 30 percent in 2007, resulting in above 5 percent market share growth in the etch market.
Interestingly, Lam Research said in their last conference call that they expect to continue to gain market share in etch this year - TEL may be feeling the squeeze here!
Another snippet I found interesting was the comment Splinter made about Applied's epitaxy business. He noted that DRAM manufacturers have started to use the epi process for the first time, which is helping market share gains considerably.
The final note is about the shift happening in memory from 200mm wafer production to 300mm. Splinter noted that Applied thinks that the memory sector will require a further 10 to 12 300mm fabs over the next few years as the technology migrations cannot be accomplished in 200mm fabs. Between 40 and 50 percent of memory is still produced on 200mm wafers but the vast majority will need to be shifted to 300mm for technology and cost reasons over the next two node shrinks, Splinter said.
So memory is good for several more years and has definitely made its mark on Applied Materials.
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