Photronics' Investor Day Highlights - Analyst Blog

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Photronics Inc. ( PLAB ), an imaging technology solutions provider, held its analyst/investor day conference in New York on Apr 3. This Zacks Rank #3 (Hold) company's conference included discussions on the company's strategies, investment highlights, product and technology developments along with Photronics' future expectations and targets.

Company Strategy

Photronics has a number of strategic relationships with many market leaders, including a joint venture with Micron Technologies ( MU ), which it believes will be of consequence to its future growth. Photronics expects that its high-end capital expenditure will lead to a stronger foothold in the memory and foundry logic markets. PLAB has a strong presence in regions such as Asia, Europe and North America, making it the global leader in integrated chips (IC) and flat panel display (FPD) photomask.

Strategic Growth Driver - Taiwan

Photronics' strong foothold in Taiwan is expected to boost its performance as two of the biggest foundries, Taiwan Semiconductor Manufacturing Company Limited ( TSM ) and United Microelectronics Corporation ( UMC ) are located in the region. Also, in late February, PLAB announced its plans to acquire all of the shares of the majority-owned Taiwan subsidiary, PSMC.

New Designs for Photomask

A photomask, which is an opaque surface etched with highly detailed patterns, is used to manufacture ICs as well as FPDs. With the FPDs increasing usage in many sizes and devices, it becomes imperative to design the photomasks according to the need. The newer designs of photomasks are augmenting the revenue for PLAB.

Photronics is in the process of inventing new technologies like photomask double and multi patterning, which is expected to enhance efficiency.

Panel Displays

PLAB expects the panel display industry to improve in the year 2013 led by personal computers (PCs), tablets and mobile phones. It also believes that the demand for flat panel displays will be stable due to the introduction of smart TVs.  

Photronics believes that its use of the AMOLED (Active-Matrix Organic Light-Emitting Diode) technology will help it increase market share, given the application of the technology in most of the mobile phones and TVs. According to PLAB, the use of AMOLED will outpace the other technologies by 2016.

Outlook

Photronics has a target of reaching the net cash position of $75.0 million in the future, compared with $43.0 million at the end of first quarter 2013. It also expects its cash capital expenditure to be in the range of $70-$90 million in 2013. PLAB remains focused on increasing free cash flow along with reducing the cost of capital and debt.



MICRON TECH (MU): Free Stock Analysis Report

PHOTRONICS INC (PLAB): Free Stock Analysis Report

TAIWAN SEMI-ADR (TSM): Free Stock Analysis Report

UTD MICROELECTR (UMC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: IC , MU , PLAB , TSM , UMC

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