Oppenheimer is making a major call on Nanometrics (NASDAQ:NANO) based on checks over the last several days that confirm NANO has won the thin-film/OCD (optical criticaldimension) shoot-out at INTC:
Based on recent checks, the 6-month-long shootout between KLAC and NANO for INTC's 22nm tool of record decision for thin-film/OCD metrology has culminated in a big win for NANO. Over 2010-12, INTC awarded NANO its 22nm business, equivalent to 60 tools, at an ASP of $1.3M, or a total consideration of ~$80M.
Near term, we estimate the impact to our '10 model to be modest, ~$5M for thin-film/OCD metrology in INTC's R&D/pilot line, with the remaining $75M evenly spread over '11-'12. Therefore, near term our '10 est moves up from a net loss of ($0.08) to $0.10--still conservative, excluding NANO's UniFire at INTC.
Longer term, NANO's win for INTC's front-end metrology business suddenly makes $1 in EPS power look realistic. We assume rev/qtr in its base business (ex INTC) can roughly double from ~$15M in Q2, to $30M, as wafer fab equipment spending recovers from $10-$12B in '09 to ~$20B in '11-'12E.
Action: This is what I call research! Great job by Gary Hsueh and Wenge Yang from Opco. Scoring a win at Intel over KLA-Tencor is a major catalyst for Nanometrics and they are the first to break the news. They also make a great case for $1 EPS power.. yet the stock is trading at less than $4.
Needless to say that I expect stock to be strong today even with futures indicating really weak day for overall market.
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