Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

For KLA-Tencor, Strong Expertise Battling With Volatile End-Markets

When it comes to wafer fab equipment (or WFE) companies, strong market share and technical expertise is no guarantee of quarter-to-quarter or year-to-year performance. Foundries and IDMs have their own schedules when it comes to buying lithography, etch, deposition, inspection, RTP, or other tools and in combination with overall market demand and internal yields, that can lead to very erratic order patterns.

I fully expect KLA-Tencor (NASDAQ:KLAC) to get its share of orders, and I believe the company's strong position in process diagnostic and control will serve it well as Taiwan Semiconductor (NYSE:TSM) ramps up in 20nm and other foundries move toward 14nm/16nm FinFET and 3D NAND. KLAC has been an okay performer over the past...

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