Seeking Alpha
View as an RSS Feed

Robert Castellano  

View Robert Castellano's Comments BY TICKER:
Latest  |  Highest rated
  • Applied Materials Drops In Liquid Crystal Display Equipment Rankings [View article]
    Yes, 2012-2013 is old data, but the trend of losing market share and ranking is consistent across all areas AMAT is in.
    2014 will be better, but watch out for the 450mm stall from ASML, which is the topic of my next Seeking Alpha article. AMAT will be eating an entire suite of 450mm tools it will not be selling, since by the time 450mm gets activated, a new technology node will be upon us. I am in the process of calculating how much AMAT lost in development costs. It will clearly impact its earnings.
    This happened when the 300mm wafers were introduced and AMAT ate all its tools, which is why there is a double peak in development costs for 300mm.
    Also, regarding any analyst upgrades such as JP Morgan, these people do not do their own work, instead purchase Gartner's data which is given to Gartner by AMAT. An executive from AMAT told me that "we have a business relationship with Gartner" in giving them all their breakouts (I noted this comment in a previous Seeking Alpha article). Therefore, Gartner's data to me is suspect and every customer's data, i.e., analysts, is suspect. Its all about the spin.
    So, although 2012-2013 data is old, those data point to the trend that the only way AMAT going to get a hockey stick upturn is if the entire industry moves up. It will not be gaining market share on its own. Unfortunately AMAT spins the information to be positive Take a look at the recent article I wrote in Seeking Alpha about TEL's S-1 Prospects. Outright deception. Know what zintips, no one from AMAT has ever called me to discuss my opinion of the company or refute my statements. I have been an AMAT watcher since 1985.
    Finally, management is weak and over their heads. The momentum AMAT has gained since Dickerson tool control has been with technology (excluding implant) in the pipeline that AMAT developed before, such as epi and process control. But pushouts in 3D and now a long pushout in 450mm is going to impact AMAT more than anyone, because it has the deepest pockets of anyone, has the largest portfolio of equipment, and would have been among the first purchases when a 450mm fab would be built.
    Jul 16, 2014. 05:26 PM | Likes Like |Link to Comment
  • Applied Materials - Aggressive Earnings Targets Make Me Cautious Despite JPMorgan's Optimism [View article]
    If you read my last article on Seeking Alpha you will find my arguments about over optimism and outright deception between what is in TEL's S-1 and TEL's financial filings.

    Also, ASML will not be porting its tools to 450mm wafers. That means that without ASML, there will be NO 450mm movement. AMAT was counting on selling a lot of 450mm tools to Intel and Samsung, who are customers of AMAT. Despite SEMI standards, a company like Intel is not going to spend $10 billion for a 450mm fab and buy from a hodgepodge of smaller companies. They would buy s suite of tools from the same manufacturer as much as they can, although they adhee to a "best of breed" policy. Since AMAT sells most types of equipment, except Lithography (ASML) and Intel and Samsung are customers, they would have a large foot in the door.
    Jul 9, 2014. 12:42 PM | Likes Like |Link to Comment
  • Applied Materials - Aggressive Earnings Targets Make Me Cautious Despite JPMorgan's Optimism [View article]
    I've recently written a series of articles in Seeking Alpha analyzing the poor performance of AMAT and the poor quality of their management. It lost market share in nearly every semiconductor sector to last year and the previous year to Lam Research in etch and KLA-Tencor in metrology/inspection. The shares they gained were from Japanese companies last year because of the weak Yen, not because of unit shipment gains, because Yen revenues are converted into dollars to calculate market shares.
    AMAT has pointed out 2014 revenues forecast are now on the low end of their initial 10-20% growth, but has been able to spin their announcements.
    Don's pay attention to what Gartner says about AMAT. As I wrote in a previous article I was told by an officer at AMAT that Gartner has a business relationship with AMAT," so anything positive in my view is suspect and therefore tainted.
    Don't pay attention to what the analysts say. They buy Gartner research and quote Gartner data in their analysis. Since Gartner spin is tainted, analyst data coming from the likes of JP Morgan are is tainted, as that data are coming from Gartner. Why, because analysts don't do their own homework, relying instead on Gartner. Check out any market share data in any analyst report and you will see source: Gartner.
    I will be writing another article soon on the LED equipment market. AMAT lost share and position, and TEL continues to bleed share and position in the past three years.
    AMAT is a dead duck in solar and their position continues to erode, as I said in a previous article.
    If you read my last article in Seeking Alpha, AMAT points a hockey stick change in share and market growth. But the data I've analyzed don't support it.
    I have no position in any stocks
    Jul 9, 2014. 08:39 AM | Likes Like |Link to Comment
  • Applied Materials' Spin Continues To Mislead Investors [View article]
    I own no stock and have no positions in any companies. Last time I did a trade was in 2008 and bought 100 shares of stock through a broker. I write these articles as a service to investors.
    Jun 10, 2014. 03:25 PM | 2 Likes Like |Link to Comment
  • Applied Materials Slides To Fourth Place In The Solar Equipment Market [View article]
    Regarding AMAT, it is what it is. I write about the facts, not wishful thinking. Management is over their heads.
    Jun 3, 2014. 08:45 PM | Likes Like |Link to Comment
  • What Applied Materials Didn't Say That Made Its Stock Pop [View article]
    Some things that were not included in the original article that were important:

    With regard to the cobalt technology, Applied Materials continues to lose market share in the metal CVD sector to Lam Research (LRCX). Applied Material's share dropped to 17.6% in 2013 from 18.1% in 2012. Lam Research's market share increased from 65.0% in 2012 to 71.3% in 2013. Applied's share would have eroded even further if it wasn't for TEL's market share drop to 8.9% in 2013 from 12.5% in 2012, which depressed the overall metal CVD market. Yes, this is the same company that AMAT is acquiring. Data used in our reports are obtained from personal interviews and published filings.

    With regard to the metrology/inspection process control market: Applied gained 5 points in wafer inspection and 3 points in litho metrology because Hitachi High Technologies, a major Japanese competitor in this sector, dropped 22.5% in Yen/Dollar conversion. Hitachi High Technologies held the number two position in the overall metrology/inspection market in 2012 but dropped to number four because of the strong Yen. In addition, Applied's revenues of $530 million in the total process control market represents just 12% of the process control market and just 2% of the overall WFE (wafer front end) equipment market.
    d. In the e-beam review market, Applied's share increased from 50.1% in 2012 to 57.4% in 2013, while KLA-Tencor's share increased from 22.9% to 23.1%. Applied's increase again was due to Hitachi High Technologies' decrease as a result of Yen/Dollar conversion. In fact, Applied's $150 million in e-beam review in 2013 is lower than the $176.4 million it registered in 2011.
    May 23, 2014. 02:03 PM | Likes Like |Link to Comment
  • What Applied Materials Didn't Say That Made Its Stock Pop [View article]
    Dickerson left KLA-Tencor because he was passed over for the top spot and went to VSEA. VSEA was successful in market share for its single wafer ion implanters, but that technology was already underway when Dickerson took the helm. Axcelis was slow to move to single wafers and lost share. Once they saw the writing on the wall, all VSEA did was to maintain share, so Dickerson was not instrumental in the market leadership at VSEA that everyone thinks.
    AMAT acquired VSEA primarily because of VSEA's ion implant technology for solar, when the market was active. The semi use of implant was helpful for AMAT because they dropped out of the market. Now Axcelis has new technology that will gain share in 2014.
    My personal feeling on the Dickerson issue is that Splinter was highly disregarded in the industry as CEO of AMAT. By picking Dickerson as CEO (the presidency was a slam dunk because of the acquisition), Splinter could defer any failure for the pending acquisition of TEL to Dickerson. If it was a success, Splinter got the acknowledgement because he appointed Dickerson as CEO to handle it. If it was a failure, it was Dickerson's fault. A win-win for Splinter.
    Any recent success for 3D that AMAT has achieved was from technology that was in the works before he arrived, and the pull-ins from Intel and TSMC on etch and deposition won't be repeated.
    Regarding the future of etch-deposition for 3D, ASML is pricing its EUV very competitively compared to immersion DUV. Once some of the kinks are resolved, Intel and TSMC will move to EUV. They didn't invest billions of dollars in ASML last year to move away from EUV technology. So AMAT's gains, particularly for metal etch, will be short lived. According to our analysis, AMAT lost 8 points in market share to Lam Research in 2013 because LRCX was not impacted by the Yen-dollar conversion that affected all Japanese manufacturers.
    May 23, 2014. 02:01 PM | Likes Like |Link to Comment
  • Semiconductor Metrology / Inspection Equipment Market Still Can't Top Overall WFE Equipment Market [View article]
    AMAT announced that revenues for the industry will be at the low end of the 10-20% range, and that their revenues will be flat to down the next quarter. Last year WFE revenues were down 1%. If you read my previous article, the WFE market may have dropped 11.5% in dollar terms, but really in the -5% range based on shipments, because of the strong Yen and Yen to dollar conversion. essentially, AMAT has been tracking the overall market for many years in terms of its own revenues. So if they say WFE will be at the low end of the 10-20% range, so will AMAT's. AMAT had a big pull in for etch and deposition tools from Intel and TSMC for 3D. So recent quarterly revenues were skewed for those purchases. We do not see a repeat in that level of purchases until 2015.
    May 23, 2014. 01:41 PM | Likes Like |Link to Comment
  • Lam Research: A Strong Buy At Compelling Valuations And Strong Growth Prospects [View article]

    Enjoyed your article but you have to be careful about what you say in the last section about global leadership. According to our analysis at The Information Network, Lam used to be the market leader in etch, but with the merger of AMAT and TEL, they are now second. In the deposition market, there are many sectors and AMAT or TEL led in most. LRCX has some leadership in small sectors. In cleaning, Dainippon Screen dominates with more than 50%. You can read some of my articles about these topics at Seeking Alpha
    Jan 9, 2014. 04:01 PM | Likes Like |Link to Comment
  • Insiders Are Buying Axcelis Technologies [View article]
    ACLS' prospects are based on what AMAT can do in implant now that it acquired VSEA, the leading competitor of ACLS. AMAT has brought over most of the team from VSEA, so they know how to move implanters. However, VSEA with $1B is sales is not AMAT with $5B in sales, so things don't move the same way. Secondly, and as I said in one of my recent articles, it seems like AMAT is on a vendetta against KLAC because VSEA's CEO Gary Dickerson, who is now AMAT's president, was turned down by KLAC's board to become CEO a decade ago and hence he moved on to VSEA. AMAT is quibbling over who has the largest share of a very small portion of the Process Control market, namely brightfield inspection, and it may be hurting AMAT in the implant business.
    Aug 15, 2013. 05:01 PM | 1 Like Like |Link to Comment
  • Buy Ultratech: Significant Upside As Foundry FinFET Delay Offers Compelling Entry Point [View article]
    This article is clearly a spin by you because of your long position on UTEK. The lithography space for FinFETS is made up nearly exclusively by ASML with some crumbs for Nikon. As you are aware and should be more honest in your articles because of your obsession with Intel, Intel invested billions of dollars in ASML because of its need for EUV and 450mm development for its devices, including FinFETS. So did Samsung and TSMC, the foundry you are speaking about. The last time UTEK had any revenues in leading edge IC manufacturing was back in 2003 when it sold $12 million in equipment, compared to $1.2 billion for both ASML and Nikon (Canon had $497 million in sales). Yes the UTEK tool is fine for back end, but sells for twice the price of a Suss tool. My data show Suss had a 56.1% share of the back-end packaging space, so please advise where you got the 80% share for UTEL you mention.
    Jul 23, 2013. 11:15 AM | 5 Likes Like |Link to Comment
  • What's All The Hubbub About Over The iPad Mini Pricing? [View article]
    Enjoyed the article and comments and must admit at first that I was skeptical that Apple was cannibalizing the more lucrative IPad with a lower price Mini, much the same as Intel did with the Pentium a few years back when they ramped the Atom and lost $1 billion in two successive quarters (read my articles in Seeking Alpha about that). I surmise Apple announced the iPad 4 at the same time to notify investors and Apple diehards that it is still in the drivers seat with anything mobile.

    My only complaint with the article is its comparison with Macy's. Remember Macy's filed Chapter 11 in 1992 based on its selling and product strategy (my wife worked for them at the time).
    Oct 24, 2012. 09:08 PM | Likes Like |Link to Comment
  • What's All The Hubbub About Over The iPad Mini Pricing? [View article]
    I enjoyed both the article and comments. My initial concern was the cannibalization of the iPad by the Mini, the same analogy I made in some Seeking Alpha articles a few years ago that Intel cannibalized the more expensive Pentium chip to make the Atom and lost $1 billion two successive quarters. I suspect that is the reason Apple announced the iPad 4 at the same time as the Mini to alert Apple diehards that they are not giving up on high-margin products.

    My only complaint with the article is the analogy with Macy's. Remember that Macy's filled for Chapter 11 back in 1992 based on their product and selling strategy (my wife worked for them at the time so I still remember the issues).
    Oct 24, 2012. 09:02 PM | Likes Like |Link to Comment
  • Tablets And Smartphones Are Killing The PC Industry [View article]
    I don't get it. PCs are only going to be down 1.2% to 350 million. That's dead. 350 is dead, not 350 million.
    Oct 12, 2012. 06:21 PM | Likes Like |Link to Comment
  • What Happened To First Solar? [View article]
    In addition to cost issues, First Solar panels have issues in hot climates which the company is targeting, and its manufacturing issues have already led to a loss in the hundred million dollar range. Both lead to less confidence in the company at a time where there is ferocious competition.

    First Solar needs to find a way to get into silicon cells and correct their manufacturing issues to develop low-cost product.
    Jun 30, 2012. 06:41 PM | Likes Like |Link to Comment