Abstract
If you're competing with Applied Materials, you should read this report. If
your not competing with Applied Materials, think again, and read this report.
Applied Materials' aggressive stance in the equipment industry means that no
company is safe.
Applied Materials' product strategies are based on a sixfold focus:
1. Providing solutions to users' problems. Applied Materials' product
technology is based on identifying and solving users' problems more so than
offering the latest technology. The company was well aware in the early 1980s
of the vacuum problems and related costs associated with the single
chamber-batch process technology that was used by the entire industry. Applied
Materials decided as early as in 1985 to switch to the single wafer,
multi-chamber technology (SWMC) -- technology that solved the vacuum problems.
In 1987 the company commercialized its first SWMC equipment. Applied Materials
is also continually improving its products rather than discontinuing a line
and replacing it with another line.
2. Developing and keeping core technology in-house. Applied Materials' core
technology consists of deposition, etching, ion implantation, thermal
processing, and CMP. The technology is developed, designed, and manufactured
internally rather than bought through acquisitions. Only metrology and
inspection became a core technology through acquisition
3. Process integration. This is Applied Materials' major strength, as the
company is providing process sequence integration through clustering. In this
method several different process chambers are capable of operating in concert
on the same platform. This in turn, enhances productivity and minimizes the
customers' capital investments.
4. Reducing the cost of ownership. In addition to process integration
strategy, Applied Materials' focused planning, designing, and manufacturing
operation led to the strategy of developing internally only three platforms --
the Precision, Endura, and Centura -- to provide its customers with system
flexibility, minimum capital investment, and minimum cost of operation. A new
product is not commercialized unless the company can prove a substantial
reduction in cost of ownership. The company also continually improves its
products to reduce training period and maintenance, and thus further reduces
the cost of ownership.
5. Providing superior infrastructure. The infrastructure that supports the
company's production and sales is able to respond very quickly to the market
and customer needs.
6. Investing carefully in non-core products. Although the company never
acquired a product line through acquisition, it did acquire metrology
capabilities with the acquisition of Orbot and Opal. Applied Materials, which
is successfully managing $10.7 billion in sales in FY2001, is choosing very
few selected joint ventures/alliances, such as the 1993 joint venture with
Komatsu to develop equipment for flat panel displays.
This report discusses the current strategies of Applied Materials as it
competes for world dominance. Strategies of its competitors are also
analyzed. Markets are analyzed and projected, and market shares for Applied
Materials and its competitors are detailed
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