Between the implosion of the dot-coms and the plunge in the semiconductor market, it’s hard to imagine a worse business these days than a semiconductor equipment dot-com.
Most of the dozen or so players in the field a year ago are gone, or have morphed into different businesses. But the handful of sites still working on creating an efficient online market for used semiconductor equipment and excess inventories of consumables have expanded their offerings to everything from 300mm epitaxial wafers to late-model multimillion dollar steppers.
Still around and kicking is Key Assets, Belmont, CA, which aims to be a neutral third-party venue which takes some of the risks out of buying and selling used semiconductor equipment online. The company has some $65 million in current listings, including newer model tools in the $1 to $1.5 million range, and expects to be profitable by the end of the year, according to Bob Gabel, Key Assets’ director of business development.
Its website recently listed 257 wafer fab tools and 92 test and assembly units, plus 32 closed sales. Sellers set the price for their equipment on this site. Key Assets offers appraisals and ratings of condition, holds the deposit while the buyer inspects the tool, and requires members to follow its rules for describing and accepting equipment.
Still, it hasn’t been an easy market to launch an online business.
“Last year there was not a lot of surplus equipment,” says Gabel. “Everyone was using what they had and wanting more. For the past six months it’s been static – few buyers, few sellers. We’re now just beginning to see a turn … many participants are brokers and resellers. The brokers are speculating now, buying low to sell high.”
Also in the market is GCEMarket.com, Cherry Hill, NJ, which focuses on simply bringing buyers and sellers together for a modest posting fee, and then letting them take care of the details themselves. It also makes money selling the assorted services associated with the transaction. James Phay, one of the company’s co-founders, says GCE has more than 773 users from 750 companies worldwide, 95% of which are end users. The site lists a couple of dozen tools in most major wafer fab categories, including 23 from TI, 31 from Siemens, and 25 from Infineon.
Traditional used equipment agents and brokers are also listing their available equipment online, to market it to buyers worldwide, then taking care of all the other aspects of the sale as usual off line. Leading equipment remarketer Comdisco Electronics, San Diego, CA, now has some $400 million worth of equipment listed on its website. The company says the fastest growing part of its total $500 million electronics business segment is equipment remarketing. And it expects used equipment sales to turn up before demand for new equipment.
“As the cycle comes up, the first side to ramp up is used equipment, when companies have capacity needs but their budgets are still tight,” explains Sergio Perez, VP of business development and marketing.
This more efficient global marketplace being created online is helping to drive the used equipment market upscale. As tool prices keep going up, and end-product life cycles keep getting shorter, companies need to change their equipment sooner, and welcome a way to turn over these costly assets.
“A year ago I wouldn’t have believed I’d be remarketing a 9-month-old, $7.9 million stepper,” says Perez. “We’ve gone from having $50,000 systems to $3 to $4 million systems on our list.”
The offline auction houses are moving into online equipment sales too, though more for lower-end equipment and distress sales. Dovebid.com offers E-Bay-like online auctions of semiconductor equipment, as well as webcasts of its live auctions, where up to 80% of bidders may be participating online.
The online site offered some 130 semiconductor production tools for auction last week, and like the specialty sites, now also offers an assortment of the support services people need to buy complex tools from afar, like escrow, inspection, shipping, dispute resolution, seller certification, and even translation. The most expensive offering was a new Brooks Automation vacuum cluster platform still in the box, minimum bid $350,000. Last week’s offerings, however, were attracting few bids.
Also new on the online market are silicon wafers. Semiconbay.com has added a line of wafers from MEMC to its on-line offerings of things like fittings and cleanroom clothes, all the way up to 300mm epitaxial wafers for $575.
“It’s totally new for this industry,” says MEMC Director of E-Commerce Ed Gallagher. “We’re testing a new channel to get rid of some excess inventory.”
MEMC expects main buyers of small lots of wafers to be R&D labs and university students. The company soon plans to list idle equipment and replacement parts for sale on line as well.
–Paula Doe, WaferNews Contributing Editor