VAT Group Leveraging Healthy Memory Markets To Gain Even More Share

As semiconductor manufacturing processes become even more demanding, it’s helping the technology leaders to consolidate their markets even further, as the differences between “good” and “good enough” become unacceptably wide for the most demanding applications and as also-rans find it increasingly expensive to stay in the game (ongoing R&D demands). That’s good news for VAT Group (OTCPK:VACNY) (VACN.SW), as this Swiss company is a leader in critical vacuum valves and is benefitting from market volume growth and increasing share.

I was lukewarm on these shares in April, but only because of the valuation. The local shares have continued to appreciate since then, climbing another 17%, but have lagged the SOX index and major semiconductor equipment suppliers like Applied Materials (AMAT) and Lam Research (LRCX). While I suppose VAT Group may look like a relative bargain next to ASML (ASML), trading at less than 7x my 2021 revenue estimate (versus closer to 9x for ASML), and with exceptional market share, I find the prospective returns too low at this point to take on the risks that go with the cyclical semi equipment space.

 

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VAT Group Leveraging Healthy Memory Markets To Gain Even More Share