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The Friday leftovers: Tegal profits, target market grows slow, NanoCon looms |
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Nov 09, 2007 at 12:19 PM |
In what may become a semiregular tradition at Chip Shots, here are a few mouthfuls of tasty Friday leftovers, starting with a welcome and unusual flavor from Tegal.
The unexpected news earlier this week that Tegal earned a quarterly profit may not have stunned the financial markets, but it certainly provided a little bit of sunshine in the plasma etch and deposition tool company's Petaluma CA, headquarters.
The move back to the black marks Tegal's first profit since December 2000---ending a nearly seven-year drought. Sure, 693,000 samolians would hardly pay Applied Materials' green fees, but for Tegal boss Tom Mika and his team, the long road back to profitability brings a bit of redemption. A friend of mine, who's toiled there for years, put it this way when he and his fellow Tegalians heard the good news: "We all did a double take. Before we broke out the champagne."
Several tidbits from Tegal's conference call bear repeating. Revenues soared, up 135% compared to the previous quarter and 111% with the same quarter last fiscal year. The margin is a few tenths of a percent away from the stated corporate target of 40%. The company's strategy of avoiding the Moore's Law-abiding mainstream markets and seeking customers who require specialized deposition and etching of new/exotic materials has paid off, with a surge of new and repeat business coming in from such sectors as LED, MEMS, compound semi, and hard disk drive over the past year or two.
At one point, Mika stopped to offer a brief explanation of the company's process (and market) focus. "I often use the term 'very difficult to deposit and etch,' because it's very technical. Basically, it has to do with how the chemistries, energies, and surfaces within the reactors affect and are affected by the new materials. In addition, it has to do with the active control of film morphology, and measures of cost of ownership such as throughput, repeatability, and time to clean the reactors. In other words, the difficult task has to be done over and over again in a production environment economically."
Mika admitted to "jumping the gun" a couple of years back when he raised expectations about the progress on one of Tegal's ongoing new product efforts---its nanolayer deposition (NLD) tool. "You can't launch a major piece of capital equipment in less than three to five years," he noted, adding "we will have something positive to say about NLD very soon." During the Q&A, he cited the deposition of titanium-nitride films on highly conformal structures as the "first NLD application."
Whether this will turn out to be the first of many positive quarterly reports for Tegal remains to be seen. Mika said the company might experience some drop-off in end sales next quarter compared to the previous one, but will still have solid year-over-year improvement. He noted the company has a "very sustainable gross margin going forward," aided in no small part by a diverse product mix and good "overhead absorption."
While the company's strategic restructuring and gameplan of managing existing product lines, smartly developing new products, and improving/streamlining its infrastructure has paid off, Mika remained resolute in his reminder that "more improvements are needed."
Congrats Tegal---now cue up "Back in Black" (either AC/DC's original or Living Colour's crunching cover version) and get the party rockin'!
Sputtering targets may not be the sexiest piece of the semiconductor materials market, but they are a pretty healthy one. Market research group Techcet issued a report zeroing in on the target sector a few weeks back, but it didn't get much coverage, so here are a few excerpts. The market is around $450 million, with a bit softer growth expected in 2007 after an 8% uptick in 2006. Tantalum and copper alloy targets are continuing to replace the traditional titanium and aluminum materials. The report sees possible shortages and continued price escalation of target metal types such as copper, tungsten, and ruthenium. Despite shifting markets and market shares, Nikko Materials has no intention of relinquishing its position as top dog in the sector, with plans to expand its target manufacturing facilities over the next two years.
Next week I'll be attending---and helping out---the Small Times NanoCon event at the Santa Clara Convention Center. I'll be running the workshop on advanced nanomanufacturing on Tuesday afternoon and moderating a panel discussion Wednesday from 130 p.m. to 3 p.m., which goes by the title of "Enabling New Applications through Nanoprinting and Nanolithography Technologies." The panelists are split between the printed electronics sector (Bioident and Dimatix) and the nanoimprint litho community (Molecular Imprints and Obducat), which should make for an intriguing "contrast and compare" conversation about two of the leading nanopatterning technologies.
Watch for my NanoCon-inspired blog posts over the coming days and weeks. If you're in the Silicon Valley area, I encourage you to come and check out the show.
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