Lam drops CMP, placing bets on etch

July 22, 2004 – Lam Research Corp., Fremont, CA, said it has ceased investment and development of its CMP systems. The company will continue to support its CMP installed base but is redeploying CMP resources, including R&D and workers, to its etch business.

The company’s Teres CMP tool “do not demonstrate sufficient advantages to garner the market share necessary for adequate returns on further investment,” said chairman and CEO James Bagley. He explained the math behind the decision in Lam’s 2Q04 conference call: the estimated 2004 copper CMP market is estimated at $430 million–etch is about seven times that amount, estimated at $3.1 billion.

“One of the major lessons that we learned from CMP was that desiring to be in a business doesn’t put you in that business,” Bagley told investors and analysts. “Having a unique and what turns out to be a pretty good technology does not necessarily mean that you can end up with a competitive product.”

Bagley also noted that Lam is placing its bet that lithography, heavily depending upon etch, will grow at a faster rate than the general wafer fab equipment market. “For the near term and certainly by the end of the year, what you will see is a company that’s still largely focused on etch and 100% focused on activities that surround etch,” he said.


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