APD Air Products and Chemicals Inc

Air Products & Chemicals Inc. (APD) announced collaboration with the Sustainable Energy Laboratory of the China University of Geosciences Wuhan to speed up the development of materials for the microelectronics industry.

The remarkable success of information and telecommunication technology within the last few decades has been attributed to the phenomenal growth of the microelectronics technology. Further, it offers strategic advantages to firms, institutions and nations through its capacity of developing products and services cheaply and efficiently. It is the engine that drives present global commerce and industry.

Microelectronics, a revolutionary technology, is very pivotal to many emerging industries in the 21st century and is also holding a central position in the global economy.    As Internet, medicine, entertainment and many other industries cannot substantially advance without this technology, it has a vantage position in engineering education in many developed nations.

By utilizing computational modeling, the project will enable better understanding of the chemical mechanisms responsible for the deposition of thin films.  The knowledge gained from such studies will help to guide the selection of new chemical precursors that address a wide variety of needs for next generation logic and memory devices.

Since 2006, Air Products has established a longstanding research collaboration program with the Sustainable Energy Laboratory of the China University of Geosciences Wuhan.

In the past five years, several U.S. patents and patent applications were filed and a number of research articles were published in high-profile scientific journals as a result of this collaboration.

Air Products was the first global industrial gas company to establish an internal R&D capability in China when it set up its Asia Technology Center in 2005, which today serves high growth market segments in China and the rest of Asia, including performance materials, electronics and merchant  industries.

Based in Pennsylvania, Air Products benefits from a long-term take-or-pay contract, a consolidated industry structure, a diverse customer base and sustained pricing power. However, soaring energy and raw material costs pose a threat to margin expansion.

In order to compensate for escalating raw material costs, Air Products has been increasing the price for a range of chemicals it makes for industrial use. Air Products faces stiff competition from Praxair Inc. (PX) and The Linde Group.

We currently have a Zacks #3 Rank (short-term Hold recommendation) on the stock.

 
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