What strategies are companies in Semiconductor-Equipment Makers using to win

In Semiconductor-Equipment Makers, the following strategies are implemented by companies to win:

1. Achieve Focused Technology Leadership

Success isn't just about having good technology, but about defining a clear area of leadership. Companies do this in one of two ways: breadth or depth.

Example: Breadth & Integration (Applied Materials): AMAT's strategy is to be a one-stop-shop, building a "unique and connected portfolio" of "co-optimized, integrated solutions." This allows them to tackle complex challenges like heterogeneous integration holistically.

Example: Specialized Depth (Lam Research & KLA): In contrast, competitors focus on being the undisputed best in a specific domain.

Example: Lam Research has "clear leadership in the etch and deposition technologies" and explicitly targets capitalizing on "etch- and deposition-intensive technology inflections like gate-all-around."

Example: KLA dominates the high-margin niche of process control and yield management, leveraging its "Broadband Plasma (BBP) optical patterned wafer inspectors." This specialization results in a 60% gross margin, significantly higher than AMAT's 47.5%.

2. Foster Deep Customer Integration and Collaboration

Winning companies act as partners, not just vendors. They embed themselves in their customers' R&D processes, often through branded platforms that go beyond standard support.

Example: Applied Materials uses its "global EPIC platform" to drive "earlier and broader collaborations" and accelerate cycles of learning.

Example: Lam Research uses its "Semiverse™ Solutions," which includes "digital twin capabilities," to enable virtual collaboration and accelerate product design in simulated environments.

Example: KLA focuses on building "deep, long-term relationships" and developing a "proactive customer engagement program" to become an indispensable partner in yield management.

3. Anticipate and Drive Key Technology Inflections

Leaders don't just respond to change; they actively enable the next big technological shift, particularly around AI, advanced packaging, and energy efficiency.

Example: Applied Materials focuses on enabling "more energy-efficient computing" and aims to "Advance Device Architecture Inflections" to help customers win the AI race.

Example: Lam Research is highly specific, targeting inflections like "gate-all-around, backside power delivery, advanced packaging, and dry extreme ultraviolet photoresist processing."

Example: KLA is also expanding into these areas by enhancing "process control solutions for advanced packaging" and developing "metrology capabilities for wide bandgap substrates" used in next-gen devices.

4. Build a High-Value, Recurring Service Business

A strong service business provides a stable, high-margin revenue stream and increases customer loyalty. The most advanced strategies are shifting from transactional services to subscription models.

Example: Applied Materials is experiencing "double-digit growth" in its service business and is actively shifting to a "subscription agreement model" to improve customer factory performance.

Example: KLA demonstrates the power of this strategy, with its Service business growing 10% to $2.3 billion. It aims to "Drive Service Revenue Growth" by increasing service contract penetration and developing new "value-added service offerings" like predictive maintenance.