In a brief note Friday morning, Credit Suisse semiconductor equipment analyst Satya Kumar said he does not think an acquisition is likely. “We do believe that TEL could probably look into making an acquisition, but we don’t think that Lam would make sense as there is too much product overlap and there could be antitrust concerns,” he wrote.
Kumar notes that Lam had about 41% of the etch market in 2006, while Tokyo electron had about 25% share; combined they would have more than 65%, with only one real competitor in Applied Materials (AMAT).
Kumar says he thinks the semi equipment space in general could use some consolidation, but doubts that the answer is a merger of Lam and Tokyo Electron, or for that matter Novellus (NVLS) and Tokyo Electron, a rumor that cropped up last year.
A more logical combination, he says, would be Lam and Novellus, since it would leave three large players, with Applied and Tokyo Electron. But he says that combination seems “unlikely.”