Semicon Plays a Game of Pick-Up Chips

Along the same line, companies are increasingly poaching other territories to improve growth rates. At Semicon, Novellus, the seventh-largest chip-equipment company, plans on highlighting its pursuit of sales from two market segments in which it is currently a small player.

One of those areas is chemical mechanical planarization -- a field dominated by Applied Materials -- in which Novellus has been helped by using its Peter Wolters resources. The other area is physical vapor deposition, known as PVD, which also is dominated by an Applied Materials product, one that Somekh helped develop during his 23-year tenure there.

Novellus will announce that its PVD product will be used by 18 customers by year-end, up from six at the end of last year. "We feel we have turned the corner ... and it will now be a successful product for Novellus," he says.

Applied Materials, the world's largest semi-equipment company, also has been broadening its revenue base. The company made three acquisitions last year as it built its services operations and, last month, Applied targeted KLA's main money center with the introduction of a new tool called Uvision.

As for when all these products get placed into new state-of-the-art factories, chipmakers will likely need to see tighter capacity in their current factories. So far, the follow-through hasn't been there, but consensus is building for an expected pickup in chip demand in coming months.

If that happens, equipment companies will begin to receive orders with stocks in line for some positive momentum. Until then, investors are in the same boat as executives -- waiting and wondering when the next wave of buying will happen.