One market analyst says probe card vendor FormFactor is "back on track" to retake market share in DRAM test. And another analyst wants a do-over for his previous bearish stance on AMAT.
FORM shaping up
FormFactor (FORM) has had its fits and starts in recent quarters, and some have even called for it to get busy trimming, and/or get busy selling. (One of our readers, meanwhile, believing this a far too simplistic synopsis, points out that not only did the company recognize the need to trim manufacturing, but its fab ops issues are more complex, concerning improper utilization and burn rates.)
But where there's a trough, there's a coming upswing, and chance to rebalance the playing field. Citing FORM's talk at his outfit's recent tech conference, Patrick Ho of Stifel Nicolaus feels the company is "back on track" with its operating model, as long as it can win back share in DRAM, and longer-term could push into NAND flash and system-on-chip designs. Initial quarters under new CEO (and former AMAT exec) Thomas St. Dennis have had "some hiccups," he notes, but 1H11 could spell the bottom for the company.
On the heels of strong Applied Materials' (AMAT) fiscal 1Q11 numbers, particularly in solar, we've got a Mea Culpa sighting: Piper Jaffray's Gus Richard says he shouldn't have downgraded AMAT back in July when it was deep-sixing its thin-film solar biz. In fact, estimates for 2011 and 2012 are too low, he now says, with backlogs well in excess of $3B and even approaching $4B by year's end.
Key to overall performance, though, is the company's bread-and-butter biz of tools for advanced semiconductor manufacturing, and here the shift to 28nm manufacturing will be the proving ground. "We believe yields at 28nm are going to be challenging as older gate stacks do not offer sufficient process latitude, high-k/metal gate processes are not mature at 28nm, and foundries move to double patterning is likely to be challenging as well," he writes. A rocky 28nm node transition will mean adding more wafer capacity, which actually is good news for suppliers -- and AMAT in particular, as the 800lb gorilla.