KLA is one of the leading suppliers of inspection and metrology products and services. The biggest positive for the company at the moment is Lam Research’s agreement to acquire KLA in a cash and stock deal worth $5.08 billion. KLA’s comprehensive product line, market position, cost reduction initiatives and strong balance sheet will generate growth whenever cyclical pressures permit and make it an attractive target for Lam.  While its memory exposure has increased over time, this is Lam’s area of strength. On the other hand, Lam is weaker in foundry and logic, which are areas of KLA’s strength. However, the company has a concentrated customer base, and near-term WFE spending does not play to its strengths (as a standalone company).

The merger combines to leading equipment vendors, so until regulators approve the deal, uncertainties persist.