Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Mattson Technology (NASDAQ: MTSN) dove on Wednesday after JPMorgan reported that Samsung is slowing down its efforts to ramp DRAM capacity. As of 2:40 Wednesday afternoon, the stock is down more than 14%.
So what: Mattson manufactures semiconductor wafer processing equipment, and it has exposure to the DRAM market. Samsung is one of Mattson's key customers, and any loss of business could be detrimental to Mattson's performance.
Mattson wasn't expecting much growth in the DRAM market over the next few years to begin with, and it expects to increase its capital spending related to DRAM through 2018 due to new technologies. Samsung's slowing down of equipment orders for DRAM certainly isn't a good thing for Mattson, but it does seem like a temporary setback.
Now what: The semiconductor equipment business is extremely volatile, and Mattson has reported erratic revenue and profitability over the past decade. Delays in equipment orders happen from time to time, and the Samsung news seems to be a short-term problem for Mattson. However, with revenue lower in 2014 compared to 2005, despite the massive smartphone market springing up during this time, Mattson's long-term growth prospects are fuzzy at best.
