Semiconductor rebound welcomed

COLCHESTER, VT—THINGS ARE LOOKING UP FOR cleanroom builders and suppliers as the semiconductor market rebounds.

In fact, some companies are turning down work as the boom, fueled in large part by telecommunications products, continues. Fab-Tech Inc. (Colchester, VT), a manufacturer of corrosive fume exhaust ducts, recently had to decline an order for ductwork from amanufacturer in Germany.

Even though Fab-Tech's plant was working at capacity, company managers didn't think it could meet the customer's extremely fast-track schedule and deliver a high level of service.

New business has “gone beyond our wildest dreams,” says vice president of marketing and sales Scott Fine. “We are seeing a bunch of projects all coming to life within the next 30 days.”

To meet demand, Fab-Tech plans to eliminate one product line and use the square footage for semiconductor-related ductwork products. It also plans to work closely with customers on scheduling to avoid turning away any more business.

Signs of a recovery first became evident just over a year ago. In 1999, the worldwide semiconductor market posted record-breaking revenue totaling $168.6 billion, a 22 percent increase over 1998 revenue, according to the research firm Dataquest Inc. (San Jose, CA).

At Facility Planning and Resources Inc. (Pittsburgh), business has increased 75 percent over last year. Most of the work for the architectural and cleanroom planning firm is coming from equipment suppliers, a market that grew 20 percent in 1999 and is expected to grow an additional 43.5 percent this year, according to Dataquest.

Another source of new business is from several universities, which are planning cleanrooms to accommodate recent equipment donations from chipmakers. The flush of new business is a big relief to the company, says President Tom Hansz. “We had projects actually stop during the downturn, causing business to shrink.”

Indeed, many projects were put on hold and the entire cleanroom industry suffered severely from the slowdown, says Ted Johnson, business development specialist at IDC (Portland, OR), a cleanroom design and construction company. IDC weathered the slump with remodeling projects, but the tide has turned. “The biggest change now is a renewed interest in greenfield construction,” says Michael O'Halloran, director of technology.

Among IDC's current projects is a 200mm fab for Motorola in China, a project that was put on hold during the downturn. A year ago IDC had a hiring freeze, but O'Halloran says the company will add nearly 30 percent more employees this year because of the increased business.

Many other suppliers report similar employee add-ons. Clean Rooms West (Tustin, CA), a turnkey cleanroom construction company, has doubled its employees over the last year to accommodate a 25 percent boost in business, according to Al Rogers, production manager.

Finding qualified personnel, however, is a problem for many of the companies enjoying the current boom. “With the previous slowdown, adjustments were made in people and inventories to coincide with declining sales volume and now those problems have all turned around,” says Ross Castrianni, president of Controlled Environment Products Inc. (Kansas City, MO), a cleanroom distributor.

“It's very difficult to find good quality project managers, and you have to be very careful with the subcontractors that you hire to make sure they have the resources,” says Blake Hodess, co-president of Hodess Building Co. (N. Attleboro, MA), a cleanroom design/build firm that has seen a 120 percent boost in business during the last year.

The labor market will likely remain tight as the growth in semiconductors continues for another two to three years. Despite the cyclical nature of the business, these builders and suppliers remain bullish. “The semiconductor industry has always had slump, so when it is down, that's when we take time to sharpen our tools,” says O'Halloran.


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