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Stout competition to take a chunk of Apple ‘s ( AAPL ) iPhone and Samsung’s Galaxy business drove Applied Materials ‘ ( AMAT ) Q2 display orders to grow nearly sixfold, and Applied Materials CFO Robert Halliday doesn’t see that slowing this year. On a year-over-year basis, display orders soared a whopping 483% to $700 million, accounting for 20% of Applied Materials’ record-busting $3.45 billion in Q2 orders. For the year, mobile will push more than 70% of those display orders, Halliday predicts. “The great majority of that is focused on the OLED market this year in terms of the order rate,” he said late Thursday on Applied Material’s fiscal Q2 earnings conference call with analysts. “It’s not a one-quarter event, and we see the concentration in mobile.” In afternoon trading on the stock market today , Applied Materials stock rocketed more than 13%, near 22.50, touching a 14-month high. Chip-gear rivals Lam Research ( LRCX ) and KLA-Tencor ( KLAC ) stocks jumped 4.5% and 2.5%, respectively. ASML ( ASML ), the No. 1 maker of chip manufacturing gear by market cap, was up 2%. Applied Materials’ equipment enables chip manufacturers such as Taiwan Semiconductor Manufacturing ( TSM ) and Intel ( INTC ) to produce chips. Last year, Applied Materials unveiled two systems that enable high-volume production of OLED displays. OLEDs, organic light-emitting diodes, are used to create thin, flexible displays and lighting panels for TVs and mobile. Apple is reportedly switching to OLED iPhone displays and might have tapped Samsung to make them, according to AppleInsider.com. The OLED opportunity is huge, Applied Materials CEO Gary Dickerson said on the call. “New display technology, such as OLED, are enabled by materials innovation,” he said. “This is creating significant new market opportunities for Applied.” At least four investment banks boosted their price targets Friday on Applied Materials stock, with Needham and Credit Suisse analysts noting Applied Materials’ huge opportunity in China, where the company has a 30-year-plus relationship. During Q2 ended May 1, Applied Materials reported $1.97 billion in silicon orders, up 15% year over year. Nand (flash memory) accounted for 49% of those orders, as companies like Micron ( MU ) and Intel ramp their 3D Nand technology. “The almost $1 billion in Nand bookings confirmed Applied Materials’ strong positions around 3D Nand with multiple products,” Needham analyst Y. Edwin Mok wrote in a research report, as he boosted his price target on Applied Materials stock to 26 from 22. Mok rates the stock a buy. Chinese orders hit $903 million, accounting for 26% of the total, as memory customers transition to solid-disc drives (SSD) from hard-disc drives (HDD), Credit Suisse analyst Farhan Ahmad said Friday. Dickerson noted Thursday that the company has doubled its sales in China over the last two years. Chinese customers are talking about spending $20 billion to $30 billion over the next four to five years, Halliday added. Ahmad boosted his price target on Applied Materials stock to 25 from 23 and kept his outperform rating. Scalper1 News
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