Tegal to Acquire Alcatel Micro Machining Systems Product Line

(September 5, 2008) PETALUMA, CA — Tegal Corporation announced an agreement with Alcatel Micro Machining Systems (AMMS) and Alcatel-Lucent to acquire their deep reactive ion etch (DRIE) and plasma-enhanced chemical vapor deposition (PECVD) products, and the related intellectual property. The addition of these capabilities to Tegal’s plasma-etch and deposition systems will reportedly enable Tegal to further expand into MEMS and 3D wafer level packaging applications. The agreement includes acquisition of product assets, patents and IP and agreements with key suppliers and distributors. Gilbert Bellini, president, AMMS, will join Tegal’s Board of Directors, and a 6-person team of high-level employees from AMMS will support Tegal for the first six months.

According to Thomas Mika, Tegal president and CEO, Tegal has been asked by customers to produce DRIE tools and had been looking for an opportunity to expand into this technology through acquisition. Mika considers the agreement with AMMS, expected to close on or around September 16, as a “logical centerpiece of the strategic plan that we’ve been formulating for the last few years.” He is excited about moving into “well-developed, existing and growing” markets in the MEMS industry as well as emerging markets in the future. Key drivers are automotive and mobile communications applications, with component integration that includes both passives and power devices. The addition of DRIE will also naturally enable Tegal to produce products with through silicon vias (TSVs), including image sensors and memory devices.

AMMS will continue to support their existing customer base. Tegal plans to both offer existing AMMS products and further develop the DRIE technology. They will work to integrate DRIE process modules into Tegal’s new multi-chamber bridge tool, with options for 200mm and 300mm chambers. In addition, Tegal will assume responsibility for AMMS’ joint development programs with key customers, as well as research and academic institutions. AMMS owns a license for the Bosch DRIE process that will not directly transfer to Tegal, but Tegal will work with Bosch directly to arrange a new license.

Mika admits that AMMS has been “challenged” on gross margins, and that plans to move manufacturing, assembly and final test operations to Tegal’s facilities in Petaluma should improve margins. Tegal expects to complete the move this calendar year. AMMS’ production facilities are in Annecy, France, and they have historically done a lot of outsourcing. Tegal’s model includes outsourcing a few critical components but keeping as much manufacturing as possible in-house.

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