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Lam Research Corp. (LRCX - Snapshot Report) and Axcelis Technologies, Inc. (ACLS - Snapshot Report) have entered into a strategic collaboration. The complexity and cost of key deposition, etching and cleaning processes have led the two semiconductor equipment makers to enter into a mutually supportive agreement.

Concurrently, Axcelis also agreed to divest its dry-strip business to Lam Research. This includes its Integra product line’s advanced non-oxidizing process technology. Thus, Axcelis will be able to focus entirely on the ion implant segment.

Lam Research will benefit from Axcelis' dry-strip IP and knowhow.  Lam also picked up Novellus Systems last year, making it one of the largest providers of semiconductor front-end technology. Therefore, the stripping technology further rounds out its portfolio and enables it to provide more complete solutions to its customers.

To survive the cutthroat competition as well as counter the challenges faced by various technologies in the semiconductor industry, companies are entering into partnerships and collaborations to provide better solutions at a faster pace to the customers. This also helps to deal with the complexities of manufacturing and lowers the cost of the technologies.

In the first quarter of fiscal 2013, Lam Research reported $906.9 million of revenues, which grew 22.3% sequentially, and 33.3% from a year ago. The year-over-year improvement was aided by higher shipments, which indicated escalating demand for LRCX product suites.

Both Lam Research and Axcelis shares carry a Zacks #3 Rank (Hold).

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