WorldNews

08/01/1999

Worldwide highlights

Sematech evolves. The convergence of Sematech and its International Sematech affiliate has taken another step forward, with International members Hyundai, Infineon Technologies, Philips, and Taiwan Semiconductor Manufacturing Co. taking part in programs that were previously open only to US members. The four firms will participate in Sematech's interconnect development efforts this year, and join the remaining programs (including front-end processes and advanced technologies) in 2000. Sematech will now do business under the International Sematech name. The status of STMicroelectronics, the other non-US company that helped form International Sematech in April 1998, is still being determined. The consortium has also vowed to establish better communications and planning relationships between its members and their international equipment and materials suppliers.

Japan's tool orders mixed. Japan-based equipment suppliers logged an April book-to-bill ratio of 1.07, the first month above unity in some time, with bookings rising 20.2% over year-ago levels to ¥80.2 billion (about $673 million), according to recent figures from the Semiconductor Equipment Association of Japan. However, orders dipped from March's ¥116.8 billion, but this is due at least in part to an end-of-year effect in March, the last month of the Japanese fiscal year. The figures are three-month moving averages. SEAJ figures on orders by Japanese chipmakers followed a similar pattern, with bookings (including Japan-made and imported tooling) at ¥50.8 billion, up 22.5% year-to-year, and purchases at ¥30.1 billion, down 28.4% year-to-year. Japan's chipmakers thus posted a book-to-bill ratio of 1.15 in April.

USA

Mattson Technology, Fremont, CA, and CFM Technologies, Exton, PA, have formed a technology and marketing alliance designed to provide customers with new options for combining wet and dry wafer processes, and opportunities for developing more efficient and better-integrated cleaning processes. Initial efforts will focus on post-implant resist removal, with future efforts looking at other cleaning and surface preparation steps, as well as joint roadmapping and marketing. The alliance should allow the firms to provide integrated cleaning processes, based on joint analysis of the needs of each given process step. There is only about 30% overlap between the firms' customer bases; Mattson is especially strong in Japan, and CFM has a substantial base in Europe.

Cirrus Logic, one of the early success stories among fabless semiconductor companies, will get back to its roots by ending participation in its five-year old MiCRUS joint venture with IBM. IBM will take over full control of the East Fishkill, NY, operation immediately after the finalization of a revised agreement, with Cirrus keeping a reduced portion of fab capacity through the end of 2000. Cirrus officials say the move is part of a new, more efficient business model.

FSI International, Minneapolis, has taken its first step into the deposition market with a new spin-on dielectric (SOD) deposition system, Calypso, based on its well-established Polaris lithography processing cluster platform. The company hopes to establish itself as a "single point of contact" for spin-on dielectrics, linking materials suppliers and chipmakers and providing process integration assistance. FSI has formally disclosed results using AlliedSignal's FLARE low-k dielectric material, and hopes to unveil details of work with other suppliers this summer.

Brooks Automation, Chelmsford, MA, has acquired substantially all assets of Domain Manufacturing Corp., a developer of data analysis, advanced process control, and process development software solutions. The cash deal is subject to certain conditions, including bank consents. Domain, which is expected to have calendar 1999 revenues of $10 million, will become part of Brooks' Factory Automation Software division. The transaction will be initially dilutive to Brooks' earnings, but is expected to be accretive to earnings in FY00.

Applied Materials, Santa Clara, CA, said it is working with SOI startup Silicon Genesis, Campbell, CA, to develop and commercialize plasma doping technologies for ion implant applications and other processes. In addition, SiGen plans to use an Applied xR120 ion implant system and Epi Centura epi deposition system as the core of its qualified tooling in licensing its SOI manufacturing process, dubbed the Genesis Process. Separately, Applied has invested $2.2 million in software developer Triant Technologies, garnering a 12.5% equity position in the Nanaimo, British Columbia, company. Applied also has become the exclusive reseller of Triant's ModelWare/RT equipment health monitoring and fault detection software technology.

Asyst Technologies, Fremont, CA, has completed the acquisition of Progressive System Technologies Inc. (PST) Now a wholly owned subsidiary of Asyst, Austin-based PST supplies substrate management systems for open-cassette, SMIF-integrated wafer logistics and reticle automation. In addition, Asyst has completed a private placement of 625,000 shares of its common stock to eight institutional investors. The placement, which closed on May 26, was priced at $18/share (for aggregate proceeds of approximately $11.3 million). The proceeds will be used for general corporate purposes.

After selling a majority stake in the company to Taiwan-based Orient Semiconductor Electronics, Integrated Packaging Assembly Corp., San Jose, CA, has seen the departure of two top executives, and cut about 40 positions from its 240-person workforce. Al Larrenaga, CFO and executive VP of finance, and sales and marketing executive VP Ernest Barrieau have stepped down from the packaging firm. CEO/President Patrick Verderico will take on the CFO duties, while Phil Marcoux has been hired as VP, sales and marketing.

Despite a previous announcement indicating that Harris Corp., Melbourne, FL, would only sell the power portion of its semiconductor business, the company has agreed to sell its entire semiconductor business to a subsidiary of Sterling Holden Co. LLC, a Citicorp Venture Capital Ltd. investment portfolio company. Harris will still retain 10% ownership; the divestiture does not include Harris' suppression or photo mask operations. Harris will receive approximately $700 million in cash, notes, retained receivables, and contingency payments in addition to equity in the business, and will use the proceeds to pay debts and for other general corporate purposes. The transaction, due to close this summer, is subject to financing, regulatory, and other approvals.

Yield management and process control software firm Yield Dynamics, Santa Clara, CA, has acquired lithography process control firm TEA Systems Corp. As part of the deal, TEA president Terrence Zavecz has joined Yield Dynamics as VP of lithography applications. The two privately held operations have been in a development alliance since the beginning of the year; in recent months the companies have combined TEA's MAPA lithography modeling and process control software with Yield Dynamics' yield mining, data management, and data analysis software.

After buying out minority shareholder Shinkawa, Research Devices Inc. (RDI), Piscataway, NJ, has changed its name to RD Automation. In addition, as a result of the buyout, COO Joseph Gasper has been named president of the company, taking over the title from Steve Bendat, who is CEO. Shinkawa, Tokyo, Japan, purchased a minority share in RDI about three years ago. Shinkawa officials in Tokyo declined to comment on why the company chose to sell its RDI shares. The company is a major producer of packaging and assembly equipment.

Semifab, Hollister, CA, has announced that it will sell, support, and manufacture a complete line of "chiller" temperature control systems under an exclusive agreement with Orion Machinery Co. Ltd., Nagano, Japan. Semifab is involved in environmental process control; Orion is one of Asia's largest manufacturers of chillers and other systems applying refrigeration, heating, and vacuum technologies. Under terms of the agreement, Semifab is expected to provide Orion systems to various US industrial sectors, including semiconductor equipment manufacturers.

RF Micro Devices has opened a new 48,000 sq. ft. epitaxial manufacturing plant in Greensboro, NC, for production of epi wafers used to make GaAs HBT devices. The facility has a capacity of several hundred thousand wafers/year. Plans called for the first molecular beam epitaxy reactor to be installed by the end of June. With the new facility, RF will be able to free up space at its existing fab in Greensboro, where it hopes to increase capacity to 50,000 wafers/year by the spring of 2001.

Standard Microsystems Corp. (SMSC) has completed the combination of its Foundry Business Unit (FBU) with the operations of privately held Inertia Optical Technology Applications Inc. (IOTA). The combined businesses will operate as Standard MEMS Inc. The transaction was effected through IOTA's purchase of the FBU's assets from SMSC in exchange for a 38% interest in the new business.

Mitsubishi Polysilicon, Mobile, AL, has begun production at its idled polycrystal silicon plant, but not at premium rates. Thomas Mackey, VP of administration said, "Our levels are still nowhere near our total capacity." At full production, the facility can handle an output of 1000 metric tons annually or 85 metric tons/month. However, the company is seeing indications of increased demand for poly, and is hoping to increase output at the facility to about 80% of capacity by the beginning of 2000.

GE Lighting and EMCORE Corp. have completed the formation of their joint venture, GELcore LLC. The new company will develop and market white light and colored high-brightness light emitting diodes (HB LEDs) as possible replacements and alternatives for such applications as miniature automotive, compact fluorescent, halogen, and traditional incandescent lighting. GELcore's first commercial products should appear in the second half of 1999. GE Lighting has a 51% interest in the venture, EMCORE 49%.

In a $1 million expansion project, Solkatronic, Fairfield, NJ, has moved its corporate offices to Morrisville, PA, combining sales, customer service, accounting, and operations in one location. The expansion is targeted for completion in October.

KDF Electronic & Vacuum Services, Orangeburg, NY, has acquired all of the former Materials Research Corp. batch in-line sputter and etch system product lines from Tokyo Electron Ltd. KDF had been manufacturing the MRC batch systems for a number of years, and with the acquisition will now take on sales and service responsibilities for the systems.

Asia/Pacific

Excimer laser supplier Cymer Inc., San Diego, CA, has relocated its Taiwanese field office, Cymer Southeast Asia Ltd., to new quarters in Hsin-Chu, Taiwan. The facility, 150% larger than the old, will service an estimated 100 Cymer laser systems in the region. The space will also house a laser-training program, expected to be available by 4Q99.

Discrete semiconductor device supplier Diodes Inc., Westlake, CA, will invest an additional $4.5 million in Shanghai Kaihong Electronics Co. Ltd.,, the manufacturing facility of its Diodes-China subsidiary. The investment will be used for the purchase of additional capital equipment, increasing Diode-China's output by 25% and expanding its product line with three new packages: SOD-323, SOT-323, and SOT-363. Diode-China has recently been running at nearly 100% of its capacity for surface-mount packages.

Japan

Tokyo-based chipmakers NEC and Hitachi have signed up for a full-scale collaboration on DRAM development and manufacturing, and are considering establishing a joint venture development and design company by the end of this year. A combining of brands and other products is also envisioned following the securing of agreements. Sources indicated that the joint 500 people from each firm - a total of 1000 - collaborating on design and process development. The tentative first target product will be 256Mbit DRAM chips with 0.15µm design rules, to be shipped in 2000.

Europe

ASM International, Bilthoven, The Netherlands, is planning to acquire atomic layer CVD firm Microchemistry LTD., a subsidiary of Finland's Fortum Corp. Definitive agreements still must be secured. Microchemistry has been developing ALCVD technology since 1987, and was founded by Tuomo Suntola, who invented the ALCVD principle. Terms of the deal were not disclosed.

Fairchild Technologies has sold its semiconductor equipment group to Suss MicroTec AG, holding company of Karl Suss, Munich, Germany. As part of the deal, Fairchild was expected to purchase up to 300,000 shares of Suss MicroTec. About 50 employees were to join Suss in the acquisition. Franz Richter, CEO of Suss MicroTec, said his firm is expecting to return about $10 million in Fairchild equipment group revenues next year, and $20 million in the following year. While Fairchild's Falcon coating systems are now employed in 256Mb DRAM production lines, Richter said plans do not call for Suss to continue to pitch those systems to the DRAM sector. Suss expects to begin delivering Fairchild systems (perhaps slightly modified) to the microprocessor and GaAS areas, as well as the packaging area - Suss' main market - beginning in early 2000. Separately, Karl Suss said it has delivered a FC150 flip chip bonder to Mainland China, to the North China Research Institute. The system will be used in the Institute's optoelectronics program.

Atotech, a division of chemicals producer Elf Atochem, has formed a strategic alliance with PacTech GmbH to provide funding and technical support for low-cost flip chip bumping and related products. Atotech purchased a minority stake in the startup company; terms were not disclosed. The companies, both based in Berlin, intend to expand flip chip activities in the US, Europe, and Asia for high-growth applications such as chip scale packages. Atotech's strengths include plating chemistry and equipment technology, while PacTech brings intellectual property for cost-effective chip bumping and assembly using a nickel/gold underbump metallization process.

Under a reorganization to focus on its semiconductor business, back-end tooling supplier ESEC, Cham, Switzerland, said it will shut down a plant in Selzach, Switzerland, and hand off its circuit board assembly division to Japanese partner Juki Corp. next year. With this latest reorganization, the company hopes to achieve break-even results for the FY ending in February 2000. Under the changes, ESEC's equipment division will be consolidated into its Cham facility. The company's circuit board assembly business, which ESEC acquired in its 1996 buy of Zevatech, will become part of Japanese partner Juki by March 2000. Terms of the deal are still being negotiated. The company's Micron flip chip business will be transferred to Cham and operations at the company's plant in Selzach will end, resulting in the elimination of about 10 to 15 jobs. Most Selzach-based employees will be offered positions in Cham.

Scotland wants to be home to the next semiconductor cluster base. The Scottish government is eyeing establishment of a new wafer foundry, a Scottish-owned semiconductor manufacturing company, and Scotland's first $100 million semiconductor/optoelectronics company in the next five years. "To deliver our vision, we plan to seek greater commercialization of our leading edge university research, more alliances between academia and enterprise, and more indigenous spinout companies," said Crawford Beveridge, CEO of the Scottish Enterprise, a UK government agency responsible for developing the Scottish economy. "We have major strengths in software, nanotechnology, and optoelectronics research. If we can link these to silicon producers we will see the creation of some leading edge companies."

FINANCIAL BRIEFS

Lam Research Corp.'s has agreed to acquire from independent third parties options to purchase up to 3.5 million shares of the company's common stock. The options are being acquired to offset an anticipated dilutive effect of a potential conversion of previously issued subordinated debt into common stock. As part of the program, the board also authorized the company to enter into put options, with the same third parties, covering up to 5.25 million shares of common stock. The premiums from the sale of the put options is expected to offset the premium cost of the call option purchases.

SEMX, Armonk, NY, has approved a stockholder plan designed to protect the company against coercive takeover attempts. Under the plan, effective June 30, shareholders will have a right to purchase one one-thousandth of a Series A Preferred Share of the corporation valued at $50. This right, which entitles the holder to receive common shares equal to two times the exercise price of the right, may not be exercised, however, until a person or group acquires or plans to acquire 15% of the company.

Shareholders of FEI Co., Hillsboro, OR, and Micrion Corp., Peabody, MA, have approved a plan to merge the two companies. In addition, FEI shareholders authorized the issuing of shares to Philips Business Electronics International BV to finance the cash portion of the stock-and-cash merger consideration that will be paid to Micrion's shareholders. A closing date has not been set for the merger of the two ion beam technology companies, pending completion of a Federal Trade Commission (FTC) review.