Although semiconductor manufacturers constitute the first target market segment for Tailwinds, head honcho Dennis Riccio also has the photovoltaic, flat panel, and medical equipment markets in mind as sectors that will benefit from the company's souped-up, networked, e-commerce-enabled value/supply chain solution strategy.
When it comes to moving into the solar space, he thinks it will be sooner rather than later.
"Whereas in the semiconductor industry we might say the supply chain is fragmented and still a bit disorganized, very regional and small players, in the solar area it appears to be a wide open field," Dennis explains. "What we know so far is that people in the solar side typically call over to the semiconductor side to try to get help. We intend to be more proactive in that, we're gonna identify what the key areas of engagement are, and I would say we'll move into the solar area in the second and third quarters of this year."
"I'll give you an example. One of our partners is LSA-Cleanparts, here in North America, and Cleanparts on a global basis. Germany is one of the strongest players in the solar market, and our partner is already engaged in cleaning the [tool] components used to create solar cells. We're going to use that as our entree into solar by working with the customers he serves. In many cases, it's our partners who are engaged in other segments, such as Ultratape, which is already working in the medical and pharmaceutical fields."
Tailwinds' fab redeployment business may have a role to play in the conversion of semiconductor tools and facilities to PV manufacturing. One example of this kind of fab transformation can be found in SolarWorld's acquisition of the former Komatsu silicon wafer manufacturing site in Hillsboro, OR, which is now being ramped and will become the largest solar wafer and cell factory in the US.
Dennis lays out some possible solar scenarios. "We think you can adapt some of the semi equipment for solar, even if you were to do some pretty radical line changes because it might be that, let's say, you had to invest a quarter-million dollars to change a tool so that it was useful for solar, there might be some economies that make sense there.
"Also, one of the things we're running into with all the fab shutdowns, is that there's not much you can do with an old semiconductor fab, except build semiconductors---except for solar. What we see is an opportunity to take some of these factories and move them on over to solar. We think for Tailwinds, if we can be involved in the hub of that by dealing with the shutdown of the factory, then staying on station if a new buyer comes in, and it's a solar company that takes over a semiconductor fab, I think you're gonna see that."
Tailwinds' Riccio wants to engage you
Tailwinds' foray into solar and its other target market segments (which could also include MEMS, per one blogger's suggestion) may one day lead to some serious coin for the company, but it's the semiconductor arena where Dennis' team's collective decades of experience should pay off first. Just ask a customer like Bill George, ON Semi's exec VP, who said in Tailwinds' kickoff press release: "Given the extreme cost competitiveness of our industry, semiconductor manufacturers are more willing than ever to work with companies who can demonstrate a value proposition that helps streamline fab productivity and reduce our manufacturing costs."
When I asked Dennis where the company is getting the most demand pull for its value proposition, he didn't hesitate. "What pops up to the top of the list is spare parts. I think that's because of cost and the drive to get costs down, and sometimes honestly it's about looking for an alternative to the OEM's high prices on its spare parts.
"Service is another area where there's alot of interest, particularly for handling some of the low- to midlevel service work to be done, which could be done easier [by an] outside [provider]. But it's also taking over activities like ion implant source cleaning, rebuilding, and conditioning, and delivering a turnkey service for that. Those are the areas that light up the most, as well as the overall interest in refurbished tools."
Dennis also eyes several areas "screaming out for a solution" that Tailwinds could provide, such as improving the economics of parts cleaning. "A parts cleaning center is much like a wafer fab, which is all about overhead absorption. If your fab is not fully utilized, then you're writing big checks. A parts cleaning center is exactly the same way: you've got four walls, a DI-water system, waste handling, and some staff. If you're not running the center at full tilt, then some months are good, some months are very bad, and overall it's not a great business model.
"However, if you take that platform and you add other things under the same roof that require the same infrastructure, you bring a balance to the business, you do a better job of absorbing the overhead, and I think in general the whole model performs better. It allows Tailwinds to be on the front end of that activity, to offer an integrated solution, and allows the customer to reduce their cost.
Parts cleaning is but one example of a bigger trend, according to Dennis. "What I believe is going to happen is that these suppliers will go horizontal, so we may help facilitate that in some cases. We may acquire a few companies and do it ourselves. If you can pull together three things that each on their own are vulnerable, that are not all that attractive, and put them under one roof, suddenly you have something that makes alot of sense."
Acquisitions and equity investments are definitely part of Tailwinds' strategy, and tie in to the "icons" in the company's business model, such as equipment and instruments. "Although we can bring in [tool] cores from just about any OEM and undertake an update enhancement, refurbishment, and such, that is not our preferred way," notes Dennis. "We're working to sign deals with OEMs wherein we actually acquire the line, much like I did when I was at Metron, where we acquired the AG RTP line from Mattson and took over responsibility, lock, stock, and barrel, for the installed base, spare parts, service applications, refurb, etc.
"What I hope will happen is this: whenever a big OEM's products come to maturity and down the life-cycle curve, those would automatically roll into Tailwinds. We take them over, and the OEM earns money from a royalty or some percentage of sales. That's what we have in mind for the branded tools: the OEM's name remains on the tool, but we take responsibility in a way that is equal to or better than the OEM itself. We're happy to go into a customer, find out what the pareto of failures are, go and do some modest product engineering, and come back with an update or enhancement that either lowers particle levels, extends the time between PMs, increases throughput, or otherwise adds some features so the tool can do a process it couldn't previously."
The company's interest in the ion implantation space represents a return to Dennis' stint as an employee of Applied Materials' implanter group in Horsham, UK. "I see a big need out there, because ion implanters are one of the highest cost of ownership tools. When I worked at Applied, each implanter burned $80,000 to $100,000 in parts per year. Now that it has shut down its implant operations, there's a huge installed base of Applied implanters out there, which represents a big opportunity [for us], including things like refurbishing the discs in the wheels when the elastomers wear out," something he characterizes as "very difficult...a black art."
There's no mysterious alchemy to what Dennis and his Tailwinds team hope to accomplish though. He uses a construction analogy to describe the start-up's outlook. "We have a bold vision here, it encompasses quite a bit when you think about it, but we're gonna build the house a room at a time, but fairly rapidly."
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Comment by GUEST on 2008-02-11 09:43:31
They want to do what Applied's Fab Solutions group is doing. It'll be tough competing on AMAT tools, but on other OEMs that do not have a global footprint it may make a lot of sense |
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