Applied Materials (AMAT): China Fab Tracker Shows Robust Demand - UBS

UBS analyst, Stephen Chin, believes Intel's China fab is starting to buy lots of etchers, CVD, PVD & implanters. Their proprietary monthly China fab tracker shows the big-4 incumbent China fabs continue to buy high levels of semicap equipment from Applied Materials (NASDAQ: AMAT).

Their new tracker shows Intel's China fab's semicap purchases last month increased 37% m/m to $260M. Of the products that Applied sells, they estimate etch was 45%, CVD was 20%, PVD was 10% and implant and inspection were each 5-10%. The firm's tracker also shows Intel's China fab purchases of raw wafers was only 10k. They are not sure what the initial NAND capacity is at Intel's China fab but if it is more than 20-30k, there could be more semicap sales upside. The tracker also shows there are still no big purchases from any of the indigenous China fabs (XMC, Huali, HH-Grace) which suggests future upside. We estimate if XMC spends $6B to build a 3D-NAND fab, this adds to Applied's EPS by $0.33 (not in the model).

No change to Buy rating or $28.50 PT.

For an analyst ratings summary and ratings history on Applied Materials click here. For more ratings news on Applied Materials click here.

Shares of Applied Materials closed at $24.38 yesterday.

You May Also Be Interested In

• Citi Adjusts Catalyst Watch List
• Sportradar Group AG (SRAD) PT Lowered to $18 at Stifel
• Douglas Dynamics (PLOW) PT Lowered to $57 at DA Davidson, Buy Rating Maintained