ASMI lays out roadmap to profits — minus RTP, Bilthoven

by James Montgomery, News Editor, Solid State Technology

Apr. 28, 2008 – ASM International has come up with an extensive new plan to return its frontend business to profitability — and rapid-thermal processing (RTP) tools aren’t in the picture. Nor is its HQ in Bilthoven, The Netherlands.

The company’s new “roadmap” seeks to focus the company’s frontend business on sustained profitability in line with a group of industry peers (defined as Aixtron, Axcelis, Mattson, Novellus, Semitool, Varian, and Veeco –), with a goal of “above-market” revenue growth by 2009, with 37%-39% gross margins (vs. 32.2% in FY07) and 11%-13% operating margins (vs. 3.4% in 2007), working capital reduced by €30M (US $46.9M), and total net capex limited to €20-€35M ($31.3M-$54.7M). (See Fig. 1 & 2)

Fig. 2. ASMI’s 2009 financial targeted improvements, based on market assumptions. (Source: ASMI)

Fig. 1. ASMI’s margins trail most of its peer group. (Source: ASMI)

Part of that focus on profitability will involve exiting the RTP market, in order to streamline the company’s wafer processing product portfolio and focus on “core strengths” of ALD technology (both thermal and plasma-enhanced, and both batch and single-wafer), PE-CVD, single-wafer epitaxy, and thermal/LPCVD batch processing. Continued support/service for existing customers will be transferred to an unidentified third party.

“Although we have always believed in the exceptional breakthrough technology of our Levitor RTP systems …we have decided to really focus on ASMI’s core strengths” in those frontend growth areas, noted company president/CEO Chuck del Prado, in a statement. Financially, the RTP business’ losses should be off the books by the end of this year, no longer impacting front-end P&L and operating results.

ASMI also plans to move its head office from Bilthoven, The Netherlands, to Almere (~50km north). Back in 2004 subsidiary ASM Europe moved its 200mm operations from Bilthoven to be integrated with Almere’s 300mm operations.

And further gains will be realized by shifting more work to ASMI’s Singapore facility, and standardizing the company’s single-wafer products onto one platform.

ASMI has been under fire from investors for several years — most recently, Fursa Alternative Strategies in February — who have lobbied to separate what they consider a historically underperforming frontend business from a healthier backend business (the 53% owned ASM Pacific Technology Ltd.). ASMI’s 4Q07 financial results suggested wisdom in such a division — the frontend business eked out a profit (


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