AMAT throws the brakes on LED fab equipment

May 10, 2012 — In light of “challenging industry conditions” in the light-emitting diode (LED) and photovoltaics (PV) manufacturing sectors, Applied Materials (AMAT) decided to restructure its Energy and Environmental Solutions (EES) segment, according to a Form 8-K filing.

While the restructuring focuses greatly on wafering systems for PV applications (see our sister publication, RenewableEnergyWorld.com for that story), Applied Materials’ roadmap includes “significant reductions in development activities for LED.” AMAT plans to support existing metal-organic chemical vapor deposition (MOCVD) customers — by and large LED makers — but will not be pursuing any new business, noted Barclays Capital.

Barclays lists Samsung, Silan, Toshiba, TSMC, Micron, and IMEC among Applied Materials’ MOCVD customers. However, analysts predict that Veeco and AIXTRON will hold enough market share (90%) in MOCVD to make other entrants minor players.

“Workforce-related actions will be finalized and implemented in accordance with local legal requirements and in consultation with employees and employee representative bodies, as required,” states AMAT’s Form 8-K filing on the EES restructuring. Approximately 250 job positions will be affected.

After AMAT’s Analyst Day in March, Credit Suisse analysts noted that the company had de-emphasized comments on MOCVD.

And one year ago, Barclays and Credit Suisse were skeptical about AMAT’s MOCVD prospects, deeming its entry a “miscalculation” in such a competitive market, where the company would not make “any traction.”

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