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Meet the new MEMC, not the same as the old MEMC |
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Oct 30, 2006 at 11:27 AM |
Up until a couple of years ago, the words "wafer-makers" and "profits" were rarely if ever uttered in the same breath.
The big silicon houses were some of the most notoriously margin-challenged companies in the semiconductor-manufacturing food chain.
How times have changed, especially at MEMC. The silicon materials and substrate manufacturer's revenues climbed to nearly $408 million for the third quarter, with income exceeding $91 million. Keep in mind that MEMC's reveunes for the same quarters in 2001 and 2002 were about $121 million and $190 million, respectively, with losses in the neighborhood of $67 million and $45 million.
In MEMC's case, a lot of the credit for the turnaround goes to one of the more intense CEOs in the business, Nabeel Gareeb. Although he may not win many popularity contests among the rank and file, he has brought a fresh perspective and energy to the company that has paid off handsomely on the bottom line, as demonstrated by MEMC's impressive string of profitable quarters. Of course, it hasn't hurt that during Gareeb's tenure price points for 300-mm and other wafer sizes have remained robust or that the insatiable appetite for polysilicon and Si photovoltaic wafers by the solar-cell makers has created a raw material shortage---and market opportunities. (Although it's a bit dated, my July 2004 interview with Gareeb in MICRO offers some insights into the man and his vision for the company.)
MEMC's has inked long-term deals to supply solar-grade silicon wafers to two PV players---with Chinese manufacturer Suntech in July and Taiwanese contender Gintech last week---that will pour an estimated $7 billion to $9 billion into the wafer company's coffers over the next decade and make it "eligible" to grab minority-equity footholds in each outfit. Both deals are structured to help MEMC add capacity, which will be critical if/when polysilicon demand surpasses supply in the next few years, as some market forecasters have warned.
MEMC has gone from whipping boy to golden boy in a few short years, with its sheen unlikely to dull for the foreseeable future. Not bad for a company that was teetering on the brink.
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