Image Source: Pixabay

Introduction
 

 The "AI hardware" is a complex ecosystem comprising of 8 distinct sub-segments (see yesterday's article here for an overview of those 8 sub-segments), each with its own unique dynamics and growth trajectories. The second sub-segment in the 4 stage semiconductor value chain  (see the initial segment here) supplies equipment and materials for the production (fabrication) of semiconductors. The companies in this stage are involved exclusively (i.e. are pure-play) in providing essential equipment such as lithography machines, etching, test and packaging equipment, automation and inspection systems and production materials such as chemicals, gases, wafers and packaging. MunAiMarkets tracks the constituents in its model Pure-Play Semiconductor Supplier Portfolio as to their stock performances, the reasons behind any changes, and analyses their current situation and future prospects. 

What Is A Semiconductor?
 

A semiconductor (aka computer chip or wafer) is a material that has an electrical conductivity value falling between that of a conductor, such as copper, and an insulator, such as glass. In many cases their conducting properties are altered by introducing impurities (doping) into the crystal structure and when two differently doped regions exist in the same crystal, a semiconductor junction is created. Connecting the two materials causes creation of a depletion region near the boundary, as the free electrons fill the available holes, which, in turn, allows electric current to pass through the junction only in one direction. and is the basis of diodes, transistors, and most modern electronics. Silicon is a critical element for fabricating most  electronic circuits and is the most common semiconductor. After silicon, gallium arsenide is the second-most common semiconductor and is used in laser diodes, solar cells, microwave-frequency integrated circuits, and others.

The Pure-Play Semiconductor Supplier Model Portfolio: UP 7.6% in May; UP 8.6% YTD
 

Below are the performances of the 5 largest constituents - Lam Research Corporation (LRCX); ASML Holding (ASML);  KLAC (KLAC); Applied Materials (AMAT); and Entegris (ENTG) in descending order and YTD, and any available news, analysis and commentary on each:

1. Lam Research Corporation: UP 12.7% in May; UP 11.9% YTD
   • Focus: is a global supplier of innovative wafer fabrication equipment which allows customers to build smaller and better performing devices. In fact, today, nearly every advanced chip is built with Lam technology.
   • Market Capitalization: $103B

   • Lam Research Corporation (LRCX): A Bull Case Theory

2. ASML Holding: UP 10.3% in May; UP 6.3% YTD
   • Focus: has a monopoly on EUV lithography essential to making physical chips out of silicon wafers. It has also transforming how microchips are made with a High NA, which stands for high numerical aperture, which is the world’s most advanced and expensive chipmaking machine.
   • Market Capitalization: $292B
   • China and tariffs have wiped off $130 billion from critical chip firm ASML since peak value
   • Exclusive look at the making of High NA, ASML's new $400 million chipmaking colossus
3. KLAC Corporation: UP 7.7% in May; UP 20.1% YTD
   • Focus: provides advanced process control and process-enabling solutions for manufacturing wafers and reticles, integrated circuits, packaging and printed circuit boards.
   • Market Capitalization: $100B
   • KLA Corporation Reports Fiscal 2025 Third Quarter Results
4. Applied Materials: UP 4.0% in May; DOWN 3.6% YTD
   • Focus: offers inspection and review tools to identify, locate, characterize, review, and analyze defects on various surfaces of wafers; wafer processing technologies and solutions and semiconductor software solutions to accelerate yield learning rates and reduce production risk.
   • Market Capitalization: $126B
   • Applied Materials Announces Second Quarter 2025 Results
5. Entegris: DOWN 13.1% in May; DOWN 30.6% YTD
   • Focus:  a leading supplier of advanced materials and process solutions for the semiconductor and other high-tech industries.
   • Market Capitalization: $10.4B
   • Entegris Reports Results for First Quarter of 2025

Conclusion
 

The MunAiMarkets Pure-Play Semiconductor Supplier Model Portfolio was UP 7.6% in May and is UP 8.6% YTD  

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