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Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
Applied Materials & Tokyo Electron merger (comments and background)
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Applied Materials & Tokyo Electron merger (comments and background)

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Section on the Applied Materials & Tokyo Electron merger from our report on Japan's electronics sector

Section on the Applied Materials & Tokyo Electron merger from our report on Japan's electronics sector

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  1. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 JAPAN’S ELECTRONICS MANUFACTURERS “MONO ZUKURI” 23nd Edition, September 26, 2013 by Gerhard Fasol, PhD, Eurotechnology Japan KK http://www.eurotechnology.com/ fasol@eurotechnology.com Section summarizing the Applied Materials + Tokyo Electron merger. Download full report here: Latest revision: http://www.eurotechnology.com/store/j_electrical/ 1
  2. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 AGENDA - LIST OF CONTENTS 7 •Executive summary •“mono zukuri” (= making things) as a philosophy and business model •Branding •“Galapagos effect”, Japan-Focus vs. globalization, and business model issues •Keiretsu industrial family bonds •Japan’s 8 major consumer electronics manufacturers •Industry sector overview, financial analysis and trends •Company overview and analysis •Hitachi •Panasonic •SONY •Mitsubishi Electric •Sharp •Toshiba •Fujitsu •NEC •Japan’s 7 major electronic component makers •Industry sector overview, financial analysis and trends •Company overviews and analysis •Murata •Kyocera •TDK •Alps Electronics •Nidec •Nitto Denko •Rohm •Other companies covered in this report •Nintendo •Canon, RICOH •Oki •Citizen •Summary
  3. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 TOKYO ELECTRON ANDTHE MERGER WITH APPLIED MATERIALS 200
  4. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 TOKYO ELECTRON 201
  5. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013202 Tokyo Electron Limited TEL founded as “Tokyo Electron Laboratories” (TEL) Founded Founder Headquarters Stock Exchange Consolidated sales Number of employees Major share holders Major business areas April 6, 1951 as 桜洋行株式会社 (Sakura yoko ?) Nov 11, 1963,Tokyo Broadcasting Systems (TBS) invests Tokyo TokyoTSE 8035 (Tokyo Electron DeviceTSE 2760) YEN 497 Billion (US$ 5.0 Billion) (March 31, 2013) 10,068 consolidated (March 31, 2010) TBS Holdings (4.83%), Chase Manhattan Bank (2.76%), JP Morgan (1.82%) semiconductor production equipment, electronic components
  6. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 TOKYO ELECTRON: REVENUES AND INCOME 203 •BothTokyo Electron’s annual revenues and annual income show strong year-on-year fluctuations due to the cyclic nature of the semiconductor industry •Clearly visible is the very strong drop in revenues in 2008 due to the Lehman crisis 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 0 100 200 300 400 500 600 700 800 900 1000 annualrevenueYENBillion US$ 1 Bill. US$ 2 Bill. US$ 3 Bill. US$ 4 Bill. US$ 5 Bill. US$ 6 Bill. US$ 7 Bill. US$ 8 Bill. Annual revenues of TokyoElectron c2013EurotechnologyJapanKK www.eurotechnology.com 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 100 50 0 50 100 150 200 annualoperatingandnetincomeYENBillion US$ 0.5 Bill. 0 US$ 0.5 Bill. US$ 1.0 Bill. US$ 1.5 Bill. TokyoElectron mean operating income mean net income c2013EurotechnologyJapanKK www.eurotechnology.com
  7. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 TOKYO ELECTRON: MARGINS 204 •Tokyo Electron shows mean annual operating margins of 7.8% and mean net margins of 4.0% 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 30 20 10 0 10 20 30 annualoperatingmargin TokyoElectron mean operating margin 7.8 mean net margin 4.0 c2013EurotechnologyJapanKK www.eurotechnology.com
  8. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 APPLIED MATERIALS 205
  9. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 APPLIED MATERIALS: REVENUES AND INCOME 206 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 0 2 4 6 8 10 12 14 16 18 20 annualrevenueUS$Billion Annual revenues of AMAT c2013EurotechnologyJapanKK www.eurotechnology.com 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 1 0 1 2 3 4 5 annualoperatingandnetincomeUS$Billion 0 AMAT mean operating income mean net income c2013EurotechnologyJapanKK www.eurotechnology.com
  10. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 APPLIED MATERIALS: MARGINS 207 •Tokyo Electron shows mean annual operating margins of 10.2% and mean net margins of 7.0% 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 30 20 10 0 10 20 30 annualoperatingmargin AMAT mean operating margin 10.2 mean net margin 7.0 c2013EurotechnologyJapanKK www.eurotechnology.com
  11. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 ACQUISITION OFTOKYO ELECTRON BY APPLIED MATERIALS 208
  12. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 MAJOR FACTS FORTHE MERGER: TOKYO ELECTRON - APPLIED MATERIALS 209 •new merged company will be created with new name: •with combined market capitalization of US$ 31 billion •dual headquarters inTokyo and Santa Clara •incorporated inThe Netherlands •Chairman =Tetsuro Higashi (Tokyo Electron) •CEO = Gary Dickerson (Applied Materials) •CFO = Bob Halliday (Applied Materials) •ownership: •68% Applied Materials shareholders •32%Tokyo Electron shareholders
  13. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 COMPARING APPLIED MATERIALS AND TOKYO ELECTRON 210 Applied Materials Tokyo Electron Revenues (sales) R&D spending Employees Patents Market capitalization ratio of combined market capitalization (=US$ 31.5 billion) Ownership of merged company US$ 7.2 billion US$ 5.4 billion US$ 1.3 billion (18% of sales) US$ 0.8 billion (14.8% of sales) 15,000 10,068 10,500 16,000 US$ 21.46 billion YEN 991.554 billion (US$ 10.07 billion) 68.06% 31.93% 68% 32%
  14. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 REVENUES 211 •Applied Materials revenues are on the order of 20% higher than revenues ofTokyo Electron 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 0 100 200 300 400 500 600 700 800 900 1000 annualrevenueYENBillion US$ 1 Bill. US$ 2 Bill. US$ 3 Bill. US$ 4 Bill. US$ 5 Bill. US$ 6 Bill. US$ 7 Bill. US$ 8 Bill. Annual revenues of TokyoElectron c2013EurotechnologyJapanKK www.eurotechnology.com 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 0 2 4 6 8 10 12 14 16 18 20 annualrevenueUS$Billion Annual revenues of AMAT c2013EurotechnologyJapanKK www.eurotechnology.com
  15. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 INCOME 212 •Mean operating and net income of Applied Materials are approximately twice as high as ofTokyo Electron 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 100 50 0 50 100 150 200 annualoperatingandnetincomeYENBillion US$ 0.5 Bill. 0 US$ 0.5 Bill. US$ 1.0 Bill. US$ 1.5 Bill. TokyoElectron mean operating income mean net income c2013EurotechnologyJapanKK www.eurotechnology.com 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 1 0 1 2 3 4 5 annualoperatingandnetincomeUS$Billion 0 AMAT mean operating income mean net income c2013EurotechnologyJapanKK www.eurotechnology.com
  16. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 MARGINS 213 •Applied Materials margins are substantially higher thanTokyo Electron Margins 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 30 20 10 0 10 20 30 annualoperatingmargin TokyoElectron mean operating margin 7.8 mean net margin 4.0 c2013EurotechnologyJapanKK www.eurotechnology.com 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 30 20 10 0 10 20 30 annualoperatingmargin AMAT mean operating margin 10.2 mean net margin 7.0 c2013EurotechnologyJapanKK www.eurotechnology.com
  17. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s electronics manufacturers (23rd edition) September 26, 2013 CONTACT AND MORE INFORMATION 225 Contact •Gerhard Fasol PhD •Eurotechnology Japan KK,Tokyo, Japan •http://www.eurotechnology.com/ •Mobile +81-90-8594-6291 •fasol@eurotechnology.com •gfasol@gmail.com More information: •reports:http://www.eurotechnology.com/store/ •twitter: http://twitter.com/gfasol/ •website: http://www.eurotechnology.com/ •personal site: http://fasol.com

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