Applied Materials Steps on KLA-Tencor's Turf

"The technology that [Applied Materials is] applying is something we are well familiar with, and our competitive position is extremely strong relative to this announcement," Jeffries said.

Still, the new tool can impact the market just by its presence, says FitzGerald. "At a minimum, a handful of customers will likely evaluate the tool and use it in their negotiations with KLA-Tencor," FitzGerald wrote. "If the tool is competitive, then Applied would likely take share and slow KLA-Tencor's growth."

FitzGerald estimated that Micron Technology(MU) and Taiwan Semiconductor(TSM) were both testing UVision. BofA Securities has done investment-banking business in the past year with Applied Materials, KLA-Tencor and Taiwan Semiconductor.

The introduction starts off a heated month for the semiconductor-equipment sector that will culminate in July at the industry's largest trade show, Semicon West, in San Francisco. Product announcements are typical in June as companies find it easier to grab the spotlight ahead of the show.

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