CAMT - Jefferies starts coverage on Camtek Onto and Nova with buy ratings

2023-04-21 08:45:28 ET

Investment firm Jefferies started coverage on semiconductor companies Camtek ( NASDAQ: CAMT ), Onto Innovation ( NYSE: ONTO ) and Nova ( NASDAQ: NVMI ) with buy ratings on Friday, citing their exposure to two of the fastest growing markets in the space.

Analyst Vedvati Shrotre noted that Camtek ( CAMT ) and Onto Innovation ( ONTO )  have exposure to wafer-level packaging inspection and metrology, which has been aided by increased packaging complexity. Conversely, Nova ( NVMI ) and Onto ( ONTO ) stand to benefit from optical metrology, given the transition to 3D transistors and chip architecture, as well as higher 3D-NAND layers and 3D-DRAM.

Shrotre said Nova ( NVMI ), which he put a per-share price target of $115 on, is seen as a optical metrology "pure-play," while Onto ( ONTO ) is likely to benefit from both packaging and optical metrology.

Camtek ( CAMT ) should benefit from packaging and metrology, Shrotre added.

"As bigger chips approach reticle limit, chip manufacturers are adopting advanced packaging techniques to disaggregate SoC into chiplets," Shrotre wrote in an investor note. "These packages increase package complexity and make identification of known-good-die critical, increasing the inspection & metrology requirements."

Shrotre added that the optical metrology market is expected to outgrow the wafer fab equipment market by 200 basis points with a compound annual growth rate of 9% as transistor scaling becomes more complex and structures grow vertically.

As processors become more complex and differing materials are used, there is a need for added metrology steps to focus on etching and deposition, Shrotre explained.

Nova ( NVMI ) recently appointed Gaby Waisman as the company's CEO and president, effective March 31 .

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