In yet another mega-deal in the semiconductor industry, Lam Research Corp. has agreed to acquire fellow IC equipment vendor KLA-Tencor Corp. in a cash-and-stock transaction valued at $10.6 billion.
Under terms of the deal, which has been approved by both board of directors, the combined company will feature Lam’s deposition, etch and clean with KLA-Tencor’s inspection and metrology technology. The combined company will have an increased opportunity and capability to address the challenges faced by customers escalating technical and economic challenges, Lam says. The deal also provides a complementary presence across market segments and provides diversity, scale and value for new opportunities in the semiconductor marketing space.
Len Jelinek, senior director of semiconductor manufacturing at IHS“The merger of these two equipment companies is very accretive for semiconductor manufacturers,” says Len Jelinek, senior director of semiconductor manufacturing at IHS. “The combined company will be able to provide key equipment to manufacturers that combines specific process activities with the monitoring of those activities.”
As technology has transitioned to high complexity levels, being able to not just complete the task but verify that the task has been completed successfully has become an essential part of manufacturing, Jelinek says. “Combining the two entities will allow the new company to further research and develop in making these two operations into a seamless manufacturing step,” Jelinek says.
Rick Wallace, president and CEO of KLA-Tencor, says in a statement that the combined company will be better suited to meet the challenges customers faced today including FinFET, multi-patterning and 3D NAND development.
According to Lam, the combined company will realize a $250 million annual cost synergy in 18 to 24 months of closing and sees it generating about $600 million in incremental annual revenue by 2020 through improved differentiation of each company’s portfolio and the creation of new capabilities.
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IHS Semiconductor Manufacturing
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