ASM Technologies – Engineering innovation

Hello everyone,

I am always trying to poke holes in any investment/investment thesis that I have. In that spirit, when a friend mentioned Mindteck to me recently, and highlighted how it had exposure to the semiconductor industry, it piqued my curiosity and I decided to give it a good look.

The main reason I looked at Mindteck was to determine how its capabilities compared to ASM Technologies, a long term and sizeable bet in my portfolio.

After reviewing Mindteck’s recent Annual Reports, Investor Presentations and AGM minutes, I have come to the following conclusions below:

• Mindteck has expertise in developing supporting software (apps, databases, etc.), and control systems (including factory automation systems) for semiconductor industry operations. In its filings, the company doesn’t explicitly mention client names, but is more open about project details when compared to ASM Technologies. Semiconductor industry clients include capital equipment manufacturers, subsystems vendors and fabs

• ASM Technologies also develops supporting software and control systems. However, unlike Mindteck, the company has capital equipment and process design expertise as well. This includes the prototyping and now even manufacturing (courtesy of its JV with Hind High Vacuum) of systems and subsystems that are critical to the semiconductor industry. The company is more cagey about project details, but from what little I can gather, the company’s client base is limited to semiconductor industry capital equipment manufacturers. If the manufacturing of its own equipment (either to capital equipment manufacturers or directly to fab operators) takes off, then this will be a huge win

• Process design, along with subsystem and system design, prototyping and manufacturing (whether it’s proprietary or as a contract manufacturer) is going to be a much harder domain for potential competitors to break into here in India, versus software and control system development

• Hence as far as the semiconductor domain is concerned, as it stands, if I were to pick just one company, I intend to stick with ASM Technologies

Curious to hear what others here think about the ASM vs Mindteck comparison, specifically as it pertains to their capabilities in the semiconductor domain.