Why Is Applied Materials, Inc. (NASDAQ:AMAT) The Best Choice in the Semiconductor Industry?

Applied Materials, Inc. (NASDAQ:AMAT) has been making some developments recently, to position itself properly in the market. Nearly all the industries it is aligned with have potential for growth. However, it is the semi-conductor industry that Applied Materials has the chance of exploiting the most. As the demand for computer based technologies rises, so does the demand for semiconductor chips.

Applied Materials is the leading manufacturer of semiconductors and the past two years have seen it almost double in value. The company’s focus on nanotechnology also gives it an edge in a market moving towards miniature technology. Additionally, the company has been involved in the development of innovative technologies, to improve its performance. Recently, the company announced its Applied Centura Tetra Z Photomask Etch System. This new piece of technology is capable of etching optical lithographic photo-masks, up to a scale of 10nm node.

The technology is one of the key equipments required to meet the demands in manufacturing of memory and logic devices. Applied Materials had also tried to expand its market towards Japan, by the acquisition of Tokyo Electron Ltd. Unfortunately, the company’s advances were rejected due to growing anti-trust concerns. If the deal had happened, it would have given Applied Materials access to the highly profitable Asian market.

Analysts have, however, viewed the failure as a blessing, since Applied Materials can now focus on its core operations. Although, the same cannot be said about Tokyo Electron, since the company now faces high costs in research and development. In fact, analysts state that Applied Materials should get rid of its low margin solar business and focus solely on microchips. The microchip industry is expected to increase sales by 5.6% this year. However, it should not be forgotten that there has been an increase in the demand for solar technology, which is likely to grow even more, given the current climate change issues.

 

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David Barry

David Barry

Barry is a senior journalist at Us Markets Daily. He reports, shoots and edits many of his own stories by himself.