Applied Materials's revenue and market share grows amid aggressive pricing, analysts said.

Applied saw its overall share of the market grow from 14 percent in 2003 to 17 percent in 2004. In two of Applied's key markets, deposition and chemical mechanical planarization (CMP), Applied also saw its market share grow last year.

In deposition, Applied increased its market share to 53 percent last year from 46 percent in 2003, while rivals Novellus Systems and Tokyo Electron Ltd. (TEL) both saw their share drop. Novellus had the biggest drop, from 21 percent in 2003 to 17 percent last year, while TEL dropped from 13 percent to 12 percent market share.

In the CMP market, Applied increased its hold on the market, growing its share by 11 percentage points to 73 percent in 2004. It's nearest rival, Japanese vendor Ebara, saw its share drop from 27 percent in 2003 to 20 percent last year, according to the Dataquest figures.

"We believe that some of Applied~{!/~}s market share gains may have been a result of the company~{!/~}s aggressive pricing strategy towards the end of the year," the Goldman Sachs analyst stated in the research report. "Recall that on its Q4 earnings call, Novellus commented that one of its competitors (we believe Applied) was engaging in predatory pricing behavior."

By: DocMemory
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