Air Products at ALD 2012

Leading industrial gas company Air Products and Chemicals Inc. (APD - Analyst Report) recently said that it will feature its chemistry and thin film deposition capabilities at the ongoing AVS Atomic Layer Deposition (“ALD”) annual meeting in Dresden, Germany.

The company’s representatives at the ALD 2012 will make several presentations both independently and jointly with external partners. These include oral presentation on atomic layer deposition (ALD) of GST layers for phase change memories and ALD of strontium oxide and titanate using novel imidazolate precursors. There will also be poster presentations on collaborative works with R&D partners.

ALD is a thin film deposition technology which uses special chemicals (“precursors”) to fabricate thin film structures for many semiconductors. The ALD meet has gained importance over the last few years as the ALD technology is capable of addressing the challenges associated with manufacturing several advanced semiconductor devices.

Air Products, which had sales of $10.1 billion in 2011, offers industrial gases as well as a variety of polymer and performance chemicals and serves technology, energy, industrial and health care customers globally. The company competes with Praxair Inc. (PX - Analyst Report), among others.

Air Products has been investing heavily in developing chemical precursors and ALD deposition tools. The company’s dedicated teams of chemists have been engaged in developing precursors which are tested in various ALD tools in laboratories in Korea and California.

Air Products benefits from a long-term take-or-pay contract, a consolidated industry structure, diverse customer base and sustained pricing power. The company’s healthy project backlog and solid bidding activity strongly position it to achieve its long-term growth target.

However, soaring energy and raw material costs pose a threat to margin expansion. Moreover, sluggish economic conditions across the U.S. and Europe may impact the demand for the company’s products in the second half of fiscal 2012.

We currently have a long-term Neutral recommendation on Air Products. The stock retains a Zacks #4 Rank, which translates into a short-term Sell recommendation.