Applied Materials and Tokyo Electron terminate merger

Applied Materials, Inc. and Tokyo Electron Limited today announced that they have agreed to terminate their Business Combination Agreement (BCA). No termination fees will be payable by either party.

The decision came after the U.S. Department of Justice (DoJ) advised the parties that the coordinated remedy proposal submitted to all regulators would not be sufficient to replace the competition lost from the merger. Based on the DoJ’s position, Applied Materials and Tokyo Electron have determined that there is no realistic prospect for the completion of the merger.

“We viewed the merger as an opportunity to accelerate our strategy and worked hard to make it happen,” said Gary Dickerson, president and chief executive officer of Applied Materials. “While we are disappointed that we are not able to pursue this path, our existing growth strategy is compelling. We have been relentlessly driving this strategy forward and we have made significant progress towards our goals. We are delivering results and gaining share in the semiconductor and display equipment markets, while making meaningful advances in areas that represent the biggest and best growth opportunities for us.

“I would like to thank our employees for their focus on delivering results throughout this process. As we move forward, Applied Materials has tremendous opportunities to leverage our differentiated capabilities and technology in precision materials engineering and drive a significant increase in the value we create for our customers and investors.”


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6 thoughts on “Applied Materials and Tokyo Electron terminate merger

  1. Michael Clayton

    Good decision in my opinion.
    Lam should be happy. TEL cloned their early etchers as I remember from early 1990’s.
    Maybe they were partners then? Or licensee’s? Anyone know that old story?

    1. JohnD

      TEL was a distributor for a number of US based equipment companies, and has had at various times, joint ventures or distributorships with : Tel-Lam; Tel-Thermco; Tel-Varian; Tel-Cobilt; Tel+KLA, etc. You can see that they learned many of their core businesses from these arrangements.

  2. Israel Beinglass

    Probably good for AMAT, maybe not good for TEL. AMAT will continue to do well in the products that they are doing well. TEL which is doing dismal will not be able to recover. Their most profitable products are under attack, track from DNS and etch from LAM and AMAT. Their furnace business is going nowhere and not much to show in ALD.
    Also Nexx has a touch competition from LAM and AMAT – Semitool. By the way Nexx was one of the company that was practically sold as a part of the remedy agreement with the DOJ. Obviously it is irrelevant right now.
    Of course there is a lot of lost opportunities and all the back and forth during the last 2 years. all the money spent on lawyers and traveling between Santa Clara and Tokyo as well as all the joint committees and sub committees waisted time.

  3. Georgy K. Vinogradov

    Oh, LAM should be happy? It was very important.

    But more important, the device manufacturers Worldwide are happy!
    The degradation was postponed.

  4. Bill Marx

    To answer Michael Clayton’s questions, Japanese visitors to Lam (probably TEL or their partners) were (foolishly) allowed to inspect and photograph the hugely successful 4000 series Rainbow etcher. Soon they came out with a copycat etcher that sold very well to “buy-Japanese-only” chip makers in Japan. That was how they entered the etch market, a typical Japanese approach to entry into the semi equipment market in the 80’s and 90’s.
    Don’t get me started on how Samsung entered the chip industry (by buying a Santa Clara chip company, shipping all the technology back to Korea, then shutting down the fab).

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