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Applied Materials (AMAT) Extends Partnership With CEA-Leti
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Applied Materials (AMAT - Free Report) is leaving no stone unturned to bolster its differentiated materials engineering solutions for specialty semiconductor applications.
This is evident from the latest extension of its long-term partnership with CEA-Leti to form a new joint lab.
Further, the joint lab aims to develop materials engineering solutions using Applied Materials' wafer processing systems and CEA-Leti's performance evaluation capabilities, focusing on power consumption, performance, and time to market.
We mark the latest move as beneficial for technology applications, including photonics, image sensors, radio frequency communications components, power devices and heterogeneous integration.
Applied Materials is expected to gain solid traction across IoT, communications, automotive, power and sensors (ICAPS) markets on the back of its latest move.
We note that the latest move is in sync with the company’s deepening focus on strengthening its ICAPS business with new products. This, in turn, will likely aid it in winning investors’ confidence in the near term.
Moreover, the business is currently experiencing application wins in etch, epitaxy, implant, metrology and inspection.
AMAT has gained 52.4% on a year-to-date basis compared with the industry’s rise of 37.6%.
Apart from the latest partnership, Applied Materials partnered with Arizona State University to create a $270 million Materials-to-Fab Center, aiming to accelerate innovation transfer from ideation to fab prototype.
Further, the center will use advanced semiconductor manufacturing equipment, allowing students and faculties hands-on learning and research.
Additionally, Applied Materials announced its plan to build a collaborative engineering center in Bangalore, India.
The center aims to unite applied engineers, global suppliers, and top research institutions to accelerate semiconductor equipment development, train future talent, and expand India's global chip ecosystem role.
Growth Prospects
All the above-mentioned endeavors demonstrate the company's commitment to strengthening its position in the global semiconductor industry.
Per a Mordor Intelligence report, the semiconductor industry is expected to reach $1.09 trillion by 2028, exhibiting a CAGR of 10.9% between 2023 and 2028.
Moreover, the aforementioned partnerships will further strengthen the company’s Semiconductor Systems segment.
For fiscal 2023, the Semiconductor Systems segment revenues increased 4.8% year over year to $19.7 billion, accounting for 74% of total revenues.
However, the underlined segment is suffering from softness in industrial automation and automotive end markets. Also, weakness in leading-edge foundry logic and NAND is a major concern.
Our model projects first-quarter 2024 Semiconductor Systems revenues at $4.7 billion, indicating a decline of 8.3% from 2022.
Zacks Rank & Stocks to Consider
Currently, Applied Materials carries a Zacks Rank #3 (Hold).
Image: Shutterstock
Applied Materials (AMAT) Extends Partnership With CEA-Leti
Applied Materials (AMAT - Free Report) is leaving no stone unturned to bolster its differentiated materials engineering solutions for specialty semiconductor applications.
This is evident from the latest extension of its long-term partnership with CEA-Leti to form a new joint lab.
Further, the joint lab aims to develop materials engineering solutions using Applied Materials' wafer processing systems and CEA-Leti's performance evaluation capabilities, focusing on power consumption, performance, and time to market.
We mark the latest move as beneficial for technology applications, including photonics, image sensors, radio frequency communications components, power devices and heterogeneous integration.
Applied Materials is expected to gain solid traction across IoT, communications, automotive, power and sensors (ICAPS) markets on the back of its latest move.
We note that the latest move is in sync with the company’s deepening focus on strengthening its ICAPS business with new products. This, in turn, will likely aid it in winning investors’ confidence in the near term.
Moreover, the business is currently experiencing application wins in etch, epitaxy, implant, metrology and inspection.
AMAT has gained 52.4% on a year-to-date basis compared with the industry’s rise of 37.6%.
Applied Materials, Inc. Price and Consensus
Applied Materials, Inc. price-consensus-chart | Applied Materials, Inc. Quote
Collaborative Movements
Apart from the latest partnership, Applied Materials partnered with Arizona State University to create a $270 million Materials-to-Fab Center, aiming to accelerate innovation transfer from ideation to fab prototype.
Further, the center will use advanced semiconductor manufacturing equipment, allowing students and faculties hands-on learning and research.
Additionally, Applied Materials announced its plan to build a collaborative engineering center in Bangalore, India.
The center aims to unite applied engineers, global suppliers, and top research institutions to accelerate semiconductor equipment development, train future talent, and expand India's global chip ecosystem role.
Growth Prospects
All the above-mentioned endeavors demonstrate the company's commitment to strengthening its position in the global semiconductor industry.
Per a Mordor Intelligence report, the semiconductor industry is expected to reach $1.09 trillion by 2028, exhibiting a CAGR of 10.9% between 2023 and 2028.
Moreover, the aforementioned partnerships will further strengthen the company’s Semiconductor Systems segment.
For fiscal 2023, the Semiconductor Systems segment revenues increased 4.8% year over year to $19.7 billion, accounting for 74% of total revenues.
However, the underlined segment is suffering from softness in industrial automation and automotive end markets. Also, weakness in leading-edge foundry logic and NAND is a major concern.
Our model projects first-quarter 2024 Semiconductor Systems revenues at $4.7 billion, indicating a decline of 8.3% from 2022.
Zacks Rank & Stocks to Consider
Currently, Applied Materials carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Badger Meter (BMI - Free Report) , Arista Networks (ANET - Free Report) and Adobe (ADBE - Free Report) . While Badger Meter currently sports a Zacks Rank #1 (Strong Buy), Arista Networks and Adobe carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Badger Meter have gained 36.1% in the year-to-date period. BMI’s long-term earnings growth rate is currently projected at 20.39%.
Shares of Arista Networks have surged 77.4% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 19.77%.
Shares of Adobe have gained 80.9% in the year-to-date period. ADBE’s long-term earnings growth rate is currently projected at 13.54%.