Downturn? What downturn? Some companies see improvement, 4Q00 to 4Q01

By Matt Wickenheiser
WaferNews Editor

For the most part, 4Q was a painful quarter to cap off what’s largely been a painful year. Several companies, however, stood out for one simple fact: Their revenue actually increased from 4Q00 to 4Q01.

Publicly held firms FEI Co., PDF Solutions Inc., and Numerical Technologies Inc. all saw increases in revenue (if not in actual income). Privately held Brewer Science Inc. doesn’t release quarterly statements, but the firm told WaferNews that numbers released for the last quarter show product sales increased by 40% in 2001, and overall sales revenue increased by 38% in 2001.

While most of the industry is taking a bath, why do these few succeed?

In a word – technology.

“Clearly these are all pushing the edge of technology,” FEI CEO Vahe Sarkissian noted of the few successful companies.

For example, FEI’s, “SEM, TEM, and dual beams have created the ability for customers to do things they couldn’t do before in terms of 3D metrology, in terms of defect analysis, and structural metrology and analysis,” explained Sarkissian.

FEI’s technology is comparable to surgery for wafers – it allows an engineer to deftly analyze a small section of a wafer anywhere by cross-sectioning. The analysis FEI’s tools allow is a critical part of a company’s success, as device sizes become increasingly small and complex.

“You go to a defect, at the precision level, and cut it,” he explained. “It’s the ability to cut, look, measure, and analyze.”

This becomes particularly important with the emergence of 300mm wafers – which have greater value than smaller wafers. Any way to analyze a wafer’s problems without destroying the wafer is an advantage. In the last year, FEI’s 300mm tools began selling in the third and fourth quarters, adding to the company’s buoyancy.

Another reason for success, said Sarkissian, is that Hillsboro, OR-based FEI deals in a number of technologies, in different areas of semiconductors – and in other industries entirely.

FEI also plays a role in mask repair – something that’s critical as the cost of masks continue to soar. The latest machine can do repairs at the 0.13nm node, Sarkissian said, and FEI’s entered an agreement with International SEMATECH to develop repair tools for the 0.10 and 0.17 nodes, as well.

FEI is also in the circuit edit business – tuning chips in the design cycle – and deals with metrology and measuring thin film heads in the wafer form, before they’re sliced.

“That’s given us some traction,” Sarkissian noted.

The company’s tools also go to the life sciences and materials sciences sectors.

“We get into the details of the structure,” Sarkissian said. “We’re in the heart of nanotechnology – in semiconductors, materials sciences, and life sciences.”

Numerical Technologies, San Jose, CA, provides lithography equipment that enables the continuation of advanced geometry shrinks – and the technology is what’s at the core of the company’s success, according to CEO Buno Pati.

Numerical was founded in 1995, with the bet that a certain technology gap would open up between tools that existed and tools that were needed for the continuation of Moore’s Law. For several years, said Pati, Numerical was “making cures for diseases no one had.” But that gap opened in 1999, said Pati, and the result is Numerical’s current success.

“During any bad environment, the investments in technology have to be there – so companies that are focused on the technology side and have the good fortune of having a majority of their business tied to the technology side, are going to do relatively well,” Pati said.

Officials from Rolla, MO-based Brewer Science, on the other hand, quickly point to customer service as one of the keys to that company’s success, and an outright avoidance of the fire/hire cycles that affect many work forces in the industry.

Brewer’s two segments of chemicals and equipment are both doing well, according to Keith Strassner and John Kellas, two division managers who work with chemicals and equipment marketing, respectively.

“We listen to the customers, to give them something that they really need right now,” said Kellas.

For example, Strassner explained, Brewer’s employees were talking with customers about four years ago about what chemicals were working, and what weren’t, and at the time recognized the emergence of dual damascene. Brewer set up products to capitalize on those needs for the photolithography area, and today holds a sizable share of the dual damascene market.

On the equipment side, said Kellas, customers have voiced the need for bridge tools – not just 300mm tools – and Brewer’s responded with its line of spin coaters.

“It’s a less risky investment,” explained Kellas.

Looking ahead, Brewer is hoping to meet a future need by working on a contact planarization program – an improved version of CMP.

Brewer maintains customer visits throughout downturns, said Loretta Wallis, corporate marketing coordinator, to maintain those relationships.

Strassner noted that there are 235 people on Brewer’s payroll, and that the work force has increased during this downturn – and there are job openings now. Keeping a steady, trained work force provides momentum through downturns into upturns, Strassner said. It also avoids the necessary retraining that must follow a massive re-hiring to build personnel levels back up following layoffs.

San Jose-based PDF Solution’s success comes from its ability to help companies with process and design integration to, “build designs that are inherently more manufacturable,” as David Joseph, exec. VP for sales, marketing, and business development puts it.

“A big part of the power of our solution is helping customers understand, during integration, where the product yield loss will come from,” Joseph told WaferNews. “We help them focus and tell them where to change.”

Around the 0.18-micron node, the product complexity has become significantly great, and the fundamental material changes have also become fundamentally great, said Joseph. Random and defect yield losses are joined by feature-driven yield loss, which is now the dominant mechanism, he explained.

“Because the number of contacts and vias is going up, it’s no longer sufficient just to keep up,” he noted. “The problem wasn’t this big, traditionally – the fab ramp and product ramp was much slower than it is today.”

The time to bring a 0.13-micron fab online today is half the time that it was for a half-micron fab, said Joseph – because you can’t leave that capital idle. Additionally, moving from the commercial-driven market to a consumer market means that new, hot products have to be built fast – to take advantage of the market.

It took seven years for the millionth PC to be sold, said Joseph. It took 10 months for the millionth Playstation 1. Playstation 2′s millionth model sold in two days, he said.

“If you’ve got a winning product, you have to build it quick,” he said.

WaferNews

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