Tegal offloads legacy etch/PVD lines, forging ahead with DRIE March 22, 2010 - Amid efforts to keep afloat as the industry tides recover, Tegal Corp. has sold off much of its technology portfolio to the OEM Group, and is poised to forge on with DRIE and certain deposition technologies. The deal, for aggregate consideration of up to $3M (of which up to $1M is subject to achieving certain sales targets, ranging from $6M to $12M+), covers Tegal‘s thin-film etch product lines: ACS 900 and 980, 6500 HRe-, and 6500 Spectra series, along with its Endeavor sputtered films and AMS PVD series, as well as IP and process know-how. OEM Group will continue to support existing customers, and will integrate the technologies into its Legends lines for PVD (MRC Eclipse), RTP (AG Heatpulse), etch (Lam AutoEtch), and implant (Varian Sunset). Thomas Mika, president/CEO, said the legacy lines, which he called "an important legacy in semiconductor capital equipment and process technology," have a good new home at a company "whose business model is built on the continued sales, service and support of late life cycle technology into new and existing customers and markets." From OEM Group’s perspective, adding the sputtered films tech in particular to its own PVD offerings creased "an unmatched product offering," according to company president Wayne Jeveli. Seeing a need in 2008 for serving mature fabs (200mm and smaller) in all markets, acquired AMAT/Metron’s "Legends" line of PVD and RTP products in July 2008, and Air Products tool services gorup in 2009. Adding Tegal’s PVD technology "complements our existing PVD product offering perfectly, and gives unique capabilities in applications likes AlN," he said. After the deal, Tegal will be left with the deep-reactive ion etch (DRIE) systems that it acquired from Alcatel Micro Machining Systems (AMMS) in Sept. 2008. And with no mention of its inclusion in the OEM Group deal, it seems Tegal also keeps its Contact nanolayer deposition (MOCVD) technology, billed as a cluster 200mm/300mm bridge tool. Nevertheless, Tegal says it will continue to "evaluate strategic alternatives" — a direction in which, with the industry still searching for its recovery footing, the company acquiesced last June by hiring financial advisors Cowan & Co. Tegal posted total 2009 sales (year ending March 31) of about $13M and a net loss of $7.9M, vs. a $18M profit on $32M in sales reported in fiscal 2008; the company had been -$10M cashflow-negative through those two years. Through three quarters of Tegal‘s current fiscal 2010 (ending March 31), sales totaled $9.3M and a net loss of -$13.1M (including -$7.8M in charges against inventory), and by the December (third fiscal) quarter total cash operating expenses had been pared to $2.1M, the lowest in more than five years, and the first cash-positive operating period in seven quarters.