May 16, 2007 – Applied Materials was the biggest supplier of equipment to flat-panel display manufacturers in 2006 with just under $1 billion in sales, after seeing its business grow 24%-30% each of the last two years, according to recent rankings from VLSI Research Inc.
Overall, display equipment sales declined 5% to $7.7 billion, as demand slowed in 2H06 after panel makers built up too much capacity and swelled product inventories. The top 15 FPD tool suppliers did a little better, holding Y-Y decline to about -1% to $6.6 billion — though that number is deceiving, and individual performances varied greatly. Four of the top 15 firms managed better than 24% growth, while five others saw sales slump by more than -10%.
Applied raked in $989 million in FPD equipment sales last year, a 30.6% increase from 2005. No. 2 Ulvac and No. 3 Tokyo Electron each saw their sales rise nearly 13%, to $954 million and $860 million, respectively. Other top growth performers in 2006 included Shibaura Mechatronics (No.9, $278 million, +24.7%), Photon Dynamics (No. 11, $164 million, +25.2%), and Orbotech (No. 12, $129 million, +63.3%). On the other end of the list was Canon, which was the only FPD tool firm to crack $1 billion in 2005, but saw that big spike in sales evaporate in 2006 to just $591 billion, a 45% slide. Also pulling down disappointing sales were Micronics Japan (-21.8%), Mitsuboshi Diamond (-17.9%), Hitachi High-Tech (-10.7%) and Hitachi Plant Tech (-12.7%). Since 2004, four of the top 15 firms have seen their FPD equipment sales grow by >30%: Orbotech (98.5%), AMAT (61.9%), Micronic Laser Systems (43.5%), and Micronics Japan (33.7%). Only Canon (-8.7%), DNS (-18.1%), and Mitsuboshi Diamond (-10.1%) saw sales in 2006 that were below levels of two years ago.
Though generally characterizing the rankings as “fairly unsurprising,” Risto Puhakka, president of VLSI research, noted that most of the larger suppliers are doing well in the FPD equipment market, for their particular niches — AMAT in CVD deposition, Ulvac with PVD, TEL in etch/cleaning, and Canon and Nikon in lithography. (Canon’s big spike in 2005 was mainly due to their early foothold for litho in larger panels, Puhakka explained, while their big drop in 2006 can be attributed to Nikon getting into the market.) Most other segments of FPD equipment suppliers don’t have that kind of rivalry between top suppliers, he noted, pointing out that AMAT has 90% of the CVD business for display, as does Ulvac with PVD, and TEL has the vast majority of the ashing business — and even Mitsuboshi Diamond is without competition for its cutting tools.
The list also has a decidedly Japanese flavor, with only four companies out of the top 15 not based there. Puhakka explained that Japan firms invested early on in display manufacturing equipment and now supply almost all aspects of that segment, and with so much display manufacturing now based in Asia, they are reaping the benefits. Even Applied’s FPD business has its roots in a Japanese JV with Komatsu (now called “Applied Komatsu Technologies,” a.k.a. “AKT”).
With most segments dominated by the usual suspects and not many marketshare battles, are there any opportunities for someone to gain some new business with FPD equipment? Puhakka thinks there are openings with inspection and testing, pointing to several firms that are addressing that segment (e.g. Photon Dynamics, Orbotech, Lasertec, and even AMAT).
Company…………………………..2006………………vs.2005……………..2006 vs.2004
Applied Materials………………..989………….757 (30.6%)……………..611 (61.9%)
Ulvac…………………………………..954………….846 (12.8%)……………..803 (18.8%)
Tokyo Electron…………………….860………….756 (13.8%)…………….834 (3.1%)
Nikon…………………………………..633………….647 (-2.2%)……………..580 (9.1%)
Canon…………………………………591…………1079 (-45.2%)…………..647 (-8.7%)
Dainippon Screen Mfg…………544………….536 (1.5%)………………664 (-18.1%)
Hitachi HIgh-Tech………………..525………….588 (-10.7%)…………..424 (23.8%)
Hitachi Plant Tech………………..330…………378 (-12.7%)…………..N/A (N/A)
Shibaura Mechatronics………..278…………223 (24.7%)…………….269 (3.3%)
Daifuku………………………………..278………….254 (9.4%)………………218 (27.5%)
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Photon Dynamics…………………164…………131 (25.2%)…………….154 (6.5%)
Orbotech……………………………..129…………..79 (63.3%)………………65 (98.5%)
Mitsuboshi Diamond……………124…………151 (-17.9%)…………..138 (-10.1%)
Micronic Laser Systems……….122…………120 (1.7%)………………85 (43.5%)
Micronics Japan…………………..111………….142 (-21.8%)……………83 (33.7%)
* Includes revenues from display related manufacturing system sales,
service, and support
Source: VLSI Research