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AUGUST 2019       TAP TIMES          -6-

                Applied Materials (from 4)

        when business at TEL was lackluster.
        As quickly as the excitement had taken
        hold for the proposed merger, it faded.

        Dual headquarters a puzzler
        We suspect the rare concept of dual head-
        quarters, where two old-line companies
        would keep their corporate identity, would
        have become an issue if the merger had                      Kokusai Electric’s single-wafer processing system
        succeeded.  Somebody always has to be
        second, even in a “merger of equals.”                    $13.11 billion, displacing Taiwan with
                                                                 $10.17 billion in sales.  It is likely, since
        In 2018, the semiconductor equipment                     China had few operating local fabs and
        market, according to trade group SEMI,                   severe constrictions by the U.S. on the
        set a record $64.5 billion, jumping 14 per-              import of “sensitive” products, such as
        cent from $62.6 billion in the prior year.               front-end semiconductor equipment, that
                                                                 the figures reflect mostly backend tool
        This figure includes backend (assembly                   buys for China.
        and packaging and test), as well as front-
        end equipment.  SEMI reported, however,
        that the global wafer processing equip-                  No merger of equals this time
        ment market, which would include Ap-                     What better time for Applied Materials
        plied, rose some 15 percent.                             to try another acquisition then when the
                                                                 sales are rolling in?  This time, there is
        In 2018, Korea was the biggest buyer                     none of this “merger of equals” nonsense,
        with $17.7 billion, followed by China with               just a straight acqusition of $2.2 billion.

             RANK        RANK          Company               2013            Revenue
             2013        2012                             Market Share       millions $      This time Applied’s
               1           1      Applied Materials           16.2           5,460.1         intended is a much
               2           2      ASML                       15.7            5,302.8         smaller company,
               3           4      Lam Research                9.4            3,153.0         Kokusai Electric,
                                                                                             which has never
               4           3      Tokyo Electron              9.1            3,057.1         made the top 10
               5           5      KLA-Tencor                  5.4            2,163.4         semiconductor
               6           6      Dainippon Screen            3.5            1,222.7         equipment sellers’
               7           8      Hitachih Hi Tech            2.6             862.0          list.
               8           7      Advantest                   2.5             844.3
               9          11      Teradyne                    2.4             822.0          Kokusai was for-
              10           9      Nikon                       1.9             636.3          merly Hitachi’s
                                  Others                     30.3           10,213.0         semiconductor
                                  Total Market               100.0          33,770.0         equipment divi-
                                                                                             sion, later becom-
          These were the standings in 2013, the year Applied Materials and TEL tried to merge.   ing Hitachi Kokusai
                                                                    (Source: After Gartner)            Next page
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