Dallas, Texas 12/12/2013 (FINANCIALSTRENDS) – Applied Materials, Inc. (NASDAQ:AMAT) as one of the major players in the semi-conductor industry and a toe-hold in the solar industry by selling components for making fuel cells, has new men at the helm to take the company forward. The new CEO and CFO inducted earlier this year appear to have had some quick strategies for the company and have already introduced some fast track movement forward.
Applied Materials merged with Varian Semiconductor to build a new phase of growth for both companies.
Moves out of solar niche
Applied Materials, Inc. (NASDAQ:AMAT) new department heads, bring their acumen and expertise from another semi-conductor company, Varian Semiconductor to Applied Materials. The company is already in the process of benefitting from the same; Applied has now pulled out of the crowded solar industry niche. For Applied, the wide-spectrum of solar fuel cells producers – which includes start-ups to high-end, sophisticated industry defining technology companies meant overcapacity – and presumably left no room for growth, besides getting funds stuck with minimal returns.
The exit from the solar industry meant that Applied could plough in more funds into a more lucrative industry where they have both the technical expertise and a firm footing within the market segment which will consume these good: display industry.
Considering the fact that the semi-conductor industry is all set to inflection point in the next few years and technology innovation will once again bring in new range of products, Applied Materials, Inc. (NASDAQ:AMAT) will now focus on product development for the display industry.
Another focus area for the company will be the services industry as well.
Applied has ‘large customers’
In the words of Appplied Materials CEO, Applied is aiming to be a key supplier to the array of some of the big names in the semi-conductor industry- Intel, TSMC, Hynix and Toshiba. Therefore, Applied’s focus on niche product development with lower development life cycles, backed by shorter process windows and commitment to consistent, uniform product range will win it more customers.
Consolidates with Tokyo Electron
Apparently, in a trend which has seen some of the big names in semi-conductor industry merge and forge ahead, AMAT could not lag behind. In September, Applied Materials has announced its merger with another semi-conductor industry stalwart-Tokyo Electron.
Earlier, Lam Research-Novellus consolidation had definitely set things in motion before ASML and Cymer announced their consolidation.
AMAT grapples with lower guidance
In matters of financials, Applied Materials, Inc. (NASDAQ:AMAT) has offered poor guidance efor the next quarter. This is drastically lesser than expectations and estimates. Where consensus was pitched at 11%, the guidance is 3 to 10%, which has definitely disappointed investors.
Besides, the expectation of growth in the chip industry for this and following quarters, for the fiscal 2014, appears to have started off on the wrong foot with another of the large-sized chipmaker KLA-Tencor losing brownie points on 10 nanometer chips.
The reticle inspection tool, considered as tomorrow tools for the manufacture of 10nm chips is currently in the research and development stage in Intel Corp labs. In fact, Intel has just completed the process for the large scale production of 14 nm chips! Other chip makers too are in the dock with, with Applied Materials becoming one of the highest losers in the first week of trading in December.
Applied Materials though located lowered guidance appears to have a focused future, with CEO and CFO in place!