In this segment of "Semiconductor Revolution" on Motley Fool Live, recorded on Jan. 20, Fool contributors Jose Najarro and Billy Duberstein explain some of the core business differences between several leading semiconductor companies, KLA (KLAC 1.28%), Applied Materials (AMAT 1.46%), Lam Research (LRCX -0.28%), and ASML (ASML -1.03%).
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Jose Najarro: What type of equipment do KLA, AMAT, A-M-A-T, and Lam make, and how do they differ from ASML, which we just took a look at?
Billy Duberstein: That's a great question, and I'd be happy to take that. ASML, since we are talking about that, I'll start with that first. There's some overlap between all of these companies' portfolios, but generally, they have a specialty in one aspect or the other.
ASML is a specialist in lithography systems, which is basically taking a very narrow beam of light and basically painting the wafer with the pattern on which the transistor will be laid down. It's like the pencil that does the drawing of the semiconductor. The reason EUV machines are so difficult is because that beam of light is like something like 13 nanometers wide, and it's very difficult to get the accuracy correct, which is why no other company has been able to come up with this technology.
Both Applied Materials and Lam Research make etch and deposition machines which put the material down on the wafer. Then they also have machines that strip it away. You put material down, you etch your pattern with lithography, and then you strip it away, leaving the transistor material on the wafer.
KLA does the process diagnostic machines. I forget, I'm drawing a blank on what exactly they're called. Their machines basically scan chips and wafers for imperfections and mistakes. They're by far and away the leaders that do that. You have deposition laying down material. Then you have lithography putting the pattern in the material. Then you have etch, which is stripping the material away. Then you have to test for imperfections and check out the design and make sure everything is OK, which is KLA.
That's at a very high level. Applied Materials is pretty diversified. They have some of the same types of equipment that KLA has, and ASML does too, actually, but in general, those are where those companies play.
