Image Source: Applied Materials
Structure of the Semiconductor Equipment Industry
The semiconductor equipment industry is highly competitive and characterized by rapid technological change. Success hinges on the ability to commercialize new technology in a timely manner, continuously enhance products to improve efficiency of customer fab operations, and manage costs and inventory effectively. Performance of constituents is heavily influenced by manufacturing capacity and fab utilization rates, which together create volatile demand cycles. The potential for unexpected shifts in demand for the group’s products leaves us unexcited about the industry’s structural characteristics.
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