Daring to DRIE: Tegal’s move into MEMS, 3D segments

March 23, 2010 – Tegal president/CEO Thomas Mika explains to SST the company’s reasons for offloading much of its legacy tools business, and where the company is putting its emphasis. Gartner’s Dean Freeman also examines the deal.

Having decided its future lies in DRIE and smaller high-growth markets such as MEMS and 3D packaging, Tegal has sold off its legacy etch and PVD products to OEM Group.

A number of factors, going back several years, led up to this maneuver, according to Thomas Mika, Tegal president/CEO, who answered a Q&A with SST in an e-mail exchange:

A two-fer in 2008.  Mika noted that from 2005-2007 Tegal’s biggest customer, STMicroelectronics, purchased many of the 6500 etch tools for PZT and platinum processes, in its "IPAD" integrated active/passive device. But with concurrent events of late 2008 — the acquisition of the AMMS DRIE technologies, and the start of the industry downturn — legacy thin-film etch and PVD sales "fell off dramatically," Mika said. "Etch basically disappeared," he said. And PVD focused on leading-edge deposition of AlN and other piezoelectric materials, for device development in FBAR and related devices, "was unique to Tegal, but still primarily in development in terms of devices," so the company started a foundry service to help continue PVD sales.

"Had it not been for our acquisition of the AMMS product lines, we would probably be out of business at this point," Mika summed up.

Daring to DRIE.  So since late 2008, Tegal’s systems sales have been primarily in DRIE: "we are now almost 100% dedicated" to it, Mika claims, targeting etch opportunities in MEMS, power devices, and 3D packaging/through-silicon via (TSV) applications. And unlike the old days, no single customer takes up a huge chunk of the company’s business, given the fragmented nature of these new markets the company now targets, Mika says.

Most equipment sales in the past year have been for MEMS, and "perhaps two PVD machines and possibly one etch machine that falls into the legacy category," notes Dean Freeman, research VP at Gartner. With remaining products in deep trench etch, "with what they have left they are mostly a MEMS company" — which, competitively, means going up against SPP/STS, and in certain other small (emerging) markets, like 3D packaging, seeing Lam and AMAT. "It’s possible that we will see the rest of the company now sold into a MEMS specialty company, or that Tegal will continue to niche along with what they have," he suggests.

Getting off the semi recovery/downturn cycle.  "Let’s face it," Mika says: "The semicap industry is recovering…until the next downturn." The industry simply can’t afford to support all equipment suppliers, something with which Mika notes he is in agreement with AMAT top exec Mike Splinter. "It remains to be seen whether the MEMS industry and its participants (both on the buy and the sell side) can mature to the point where the semicap industry did, by truly valuing the technology embodied in the equipment and process know-how of its suppliers," he says. "The jury is out on this." He recalled the gallows-humor joke about the difference between a recession and a depression — whether it’s your neighbor who loses his/her job, or if it’s you.


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