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Applied Materials Dominates the Semiconductor Equipment Space in XLK

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Overview of the firm

In this series, we’ll compare the performance of firms in the semiconductor equipment subsector such as Lam Research Corporation (LRCX), KLA-Tencor Corporation (KLAC) and Applied Materials (AMAT).

Lam Research is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. It designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits.

Lam Research also offers a broad portfolio of complementary products that are used in several areas of the semiconductor manufacturing process flow. These areas include:

  • plasma etch
  • thin film deposition
  • photoresist stripping
  • wafer cleaning

Lam Research’s customers include semiconductor manufacturers that make memory circuits, microprocessors, and other logic-integrated circuits for a wide range of consumer and industrial electronics.

Lam Research currently has a market cap of $11.37 billion.

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Applied Materials leads in market cap

KLA-Tencor is a capital equipment company based in California and founded in 1997. The firm supplies process control and yield management products for firms in the semiconductor, data storage, and LED segments.

Applied Materials provides manufacturing equipment, services, and software to the global semiconductor, flat panel display, solar PV (photovoltaic), and related industries. It operates in the following four segments:

  • Silicon Systems
  • Global Services
  • Display
  • Energy and Environmental Solutions

Applied Materials’ business is driven by worldwide demand for semiconductors. While the market cap for KLA-Tencor stands at $8.11 billion, Applied Materials has a market cap of $18.68 billion.

You can invest in Applied Materials (AMAT) by investing in the VanEck Vectors Semiconductor ETF (SMH). Applied Materials accounts for 3.95% of SMH. It also forms 0.5% of the Technology Select Sector SPDR (XLK).

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