March 31, 2009 – Budapest, Hungary-based Semilab is staking its claim in the metrology sector with a pair of new acquisitions to broaden its portfolio and cement a foothold in Tier 1 fabs.
The two new acquirees — Advanced Metrology Systems (AMS) and QC Solutions — are being folded into a new Massachusetts-based division called Semilab AMS, each bringing to the table different components of metrology technology to beef up Semilab’s expertise in materials characterization. AMS offers metrology technology for characterizing 3D etched structures including high aspect ratio contacts and trenches; metal film thickness on product wafers; and high-speed online mapping of low-k material properties. QC Solutions offers noncontact nondestructive systems to accurately and repeatedly measure electrical properties of epitaxial and implanted silicon wafers.
The deals came about, according to Chris Moore, president/CEO of now Semilab AMS, because a mutual industry acquaintance to both Semilab and AMS recognized synergies. “They approached us. quite a while ago — early last year, before the major downturn,” he told SST. AMS’ private equity owner, JHW Greentree Capital, wasn’t shopping its AMS investment, but in the world of PE there’s always an eye to making a satisfactory return. At first the response was “interesting, for some day,” Moore said; that eventually bloomed into a cooperation between sales channels, then expanded to Semilab realizing that it would make the most sense to just buy them.
The timing was just fine with AMS’ owners, who had just the one asset in the semiconductor industry, and weren’t prepared for the sudden unpredictability in the market since the DRAM market tanked. Once the economy headed south too, modeling after past cycles wasn’t viable, and an unpredictable market proved a bit too distasteful. (Moore wouldn’t provide specifics of the all-cash transaction, but did say that Semilab “took advantage of the times.”)
Semilab is strong in solar and materials characterization, but it suffers from a lack of industry clout — it’s “the largest unknown metrology company,” Moore quipped, and it doesn’t have much business online in Tier 1 fabs. And that’s where AMS comes in. “Semilab saw two things [in AMS]: a small company selling to Tier 1 fabs, and technologies complementing their base.”
Chris Moore, president/CEO of Semilab AMS
In terms of technology, the key to Semilab’s strategy is a collection of technologies that can be combined and applied to certain key applications. Much of it has been assembled via M&A over the past couple of years: noncontact electrical (QC Solutions), contact electrical (SSM, majority share bought in March 2008), optical, and x-ray (via Sopra, September 2008). One example Moore cited: a conceivable tool that could handle pre- and post-anneal, combining Semilab technologies from AMS and Boxer Cross (acquired from Applied Materials last fall), with noncontact electrical tools (QC Solutions) for epitaxy. Another example: high-k. Semilab’s lineup of technologies spans thickness, roughness, and k value (via spectroscopic ellipsometry and x-ray), and leakage (via SSM) — “if you know those four, you know everything you need to know about high-k,” he said.
While cluster-type tools aren’t a new concept, most companies wouldn’t do” setups like the aforementioned examples, instead focusing on a more narrow expertise, Moore said. And for 300mm Tier 1 fabs, that solves a big pain point in moving material between tools. “It’s a lot better [for the fab] to have one tool with one move, get the information you need, and then go on to the next problem,” he said.
How is Semilab positioning itself in the metrology sector vs. competitors?
“We have no intention of taking on KLA-Tencor head-to-head. They do a lot of inspection and software, but not a lot of metrology. Semilab [with its acquired units over the past year] is strong in metrology in a number of areas. We get availability of common platforms across groups, which lowers production costs; we now have a direct sales and service worldwide. Both improve our ability to work directly with higher-end fabs.
How tough is it to get business in Tier 1 fabs in the current environment?
“The downturn makes it easier…they have more time, more attention when they’re not running full-out. It’s not easier to sell [equipment], but it’s easier to get evals. [Our message is that] we have a track record with a company that has already supplied you with equipment you like, and now we’re backed by a bigger player — and now we have support people in your area.”
Are fabs more receptive to evals in the past few months, if not actual tool sales?
“At AMS, not really. It’s easier to talk to them and keep their attention span; the last four or five weeks we’ve been talking to our customer base, they come up more & more with, ‘Can we do this-and-this’ stuff. Overall, is it easier [to get business?] Probably. It’s not something AMS could take advantage of — but Semilab can.”
What’s your take on consolidation in the current industry/macro environment, and the need to build critical mass to survive?
“I’m not sure if it’s consolidation or failures. It comes down to, do you buy the assets of a player, or buy their technology? If it’s a medium-sized firm (>$10M-$15M), do you just let them go [away]? If you’re a bigger player you may not want to take on a struggling firm’s legacy products, you can’t leverage money out of it…they must have something really new and nice, that you can do something with it.
“Attrition is a better word. Watch for a lot of ‘walking wounded’ metrology companies. Fabs are moving ahead — they’re not buying lots of equipment, but they need [to support their] next-generation processes. That’s tough to do when you’re a small [supplier]. This speaks to critical mass, and in more than one industry. Those with critical mass in just semiconductors are really hurting now. Semilab has critical mass in solar too.
“Back in 2007 there were niche markets; you could grow to a reasonable size. As long as you worked with customers and provided what they needed, critical mass wasn’t an issue. But then customers stop planning — that’s what happened in 4Q08, they literally froze for more than a quarter. At that point, you start to look at functional resources, how to get to a broader market base. You’re good in that niche, but they’re frozen. Then the question becomes: what do the deep-pockets owners want to do? How shellshocked are they too?”
We have to ask — what’s your take on the state of 450mm tool development?
“Semilab has a 450mm tool because they’re working with wafer makers. Semilab AMS has done design work on a 450mm tool. But for us, 450mm is a scaling issue; we need bigger bridges, wafer handlers, etc. But we’re not trying to deposit on a bigger wafer; that’s not our problem.
“The market [for 450mm] may develop, certainly for manual tools, for people to build 450mm wafers and epitaxy. People are starting to work on this. Once you have those tools, wafer handlers take it. We expect to be doing serious work…testing for SEMATECH and others. Some of that work is on upscale 300mm tools, of course. Once the wafer handlers are sorted out, it’s not a hard integration problem. That doesn’t negate the need to work with chucks, holders, etc., but it’s not the same level of problem as building a process tool…and we can build in stages — a manual load — for R&D work for the next few years, before ever having to do an automated system.”
When do you foresee 450mm becoming a manufacturing reality?
“450mm will be controlled by two things: when fabs put serious money on the table, and when equipment firms want to do it.” — J.M.