KLAC Fundamental Analysis

KLA-Tencor Corporation (KLAC) was founded in 1975 in San Jose – California, United States.

KLAC operates for the design, manufacture and marketing of process control and yield management systems for the semiconductor and other related microelectronics industry, areas in which it is the world leader.

KLA-Tencor offers a range of products and services that are used by every wafer, integrated circuit manufacturers and photomask manufacturers from all over the world; the company provides inline wafer defect monitoring; critical dimension metrology; reticle and photomask defect inspection; wafer overlay; film and surface measurement, and overall yield and fab-wide data analysis.

KLAC’s current products portfolio can be divided in 4 different groups, those being; Metrology, Defect Inspection, Data Storage and Customer Service and Support, Yield Management Software Solutions; the company also provides refurbished (cleaned and repaired) KLA-Tencor certified tools, along with warranty and support.

The semiconductor industry grew almost 25% in 2005, while the semiconductor equipment industry grew over 60% last year. Analysts are forecasting that the semiconductor revenue growth will slow to approximately 10% and semiconductor equipment revenues to decline by approximately 7% over the current year.

Over the longer term, KLAC expects the process control to continue to represent a high percentage of their customers’ capital spending.

KLA Tencor employees are now over 5,500 and its full market capitalization is over 9 Billion Dollars.

On the fiscal year ended last June 30, KLAC achieved a profit margin of near 18% and an Operating Margin near the 18.15% area.

With total revenue of around $2 Billion, the company’s revenue per share was over $10 in 2005.