Applied Materials has achieved a dominant position in the semiconductor equipment market by focusing on a global presence, a broad and expanding product line, and exacting customer support — a strategy initiated in the mid-80s. In the ’90s, most of its competitors had recognized that to be competitive with Applied Materials, they too must duplicate these tactics.
AMAT competes against Lam Research and Tokyo Electron in deposition and etch, and against ASML and KLA in metrology/inspection. Also, as foundry/logic companies move from DUV, with multiple patterning steps, to EUV, deposition-etch steps are minimized, reducing the need for these process tools from AMAT, KLAC, and Tokyo Electron.
Semiconductor equipment players’ revenues are highly sensitive to chipmakers’ capex. They are exposed to foundry/logic players (Intel, TSMC, Samsung LSI) and the memory names (Micron, SK Hynix and Samsung).
Semiconductor equipment is required more in making leading-edge chips and computationally intense applications such as application processors, server chips and CPUs. The semiconductor equipment industry’s revenue will be highly sensitive to a COVID-19 impact on demand for these types of chips.
After nearly 20 years as market leader in the semiconductor equipment front end market, Applied Materials lost its dominance in 2019 and but regained it in 2020.
This report discusses the current strategies of Applied Materials as it competes for world dominance. Strategies of its competitors are also analyzed. Markets are analyzed and projected, and market shares for Applied Materials and its competitors are detailed.