MRC sputtering tools manufactured by outside contractor

06/01/1997

MRC`s sputtering tools manufactured by outside contractor

In a deal that could be an indicator of changes in the way chipmaking tools are built, semiconductor industry newcomer Derlan Inc., Santa Ana, CA, is expected to begin manufacturing Materials Research Corp.`s sputtering systems later this year under a three-year, $150 million agreement.

In June, Derlan Inc. will begin manufacturing MRC`s Eclipse Mark II, Eclipse Star, and Solarus PVD systems at its Santa Ana facility. Final assembly work will be conducted at a former MRC facility in Congers, NY, which Derlan said it is now leasing from MRC. Earlier this year, MRC, a Sony Corp. subsidiary, moved operations to Gilbert, AZ, from its traditional New York base as part of a company reorganization.

The PVD system outsourcing is part of MRC`s outsourcing strategy, according to a spokeswoman. "We`re really just trying to become an engineering-focused company. We had already been outsourcing the manufacturing of the back end of the PVD systems, we are just continuing our outsourcing, and now outsourcing more of the system. This is apparently a trend that has been occurring throughout the industry," she said. MRC also outsources the manufacture of its CVD systems, however the spokeswoman could not say which companies are performing the subcontract work. MRC will continue to perform in-house test and system integration on both PVD and CVD systems/customer specifications, the spokeswoman added.

While virtually all semiconductor equipment companies engage in outsourcing, this agreement takes the concept further than most producers have done, handing off almost the entire manufacturing process to a vendor. If Derlan and other vendors can make a compelling case for such shifts, toolmakers could extend their evolution into something along the lines of a fabless semiconductor company, in which design and process development are the only internal competencies.

Derlan Inc., a subsidiary of Derlan Industries, Toronto, has been manufacturing equipment for MRC for more than a year, said Bryan Held, senior VP and chief financial officer of Derlan Industries.

"This is a very significant contract for us. It`s something we`ve been targeting since 1994," Held said. In the last few years, Derlan Industries has narrowed the focus of its business, primarily in the aerospace and industrial technologies arenas. Derlan Inc., with experience in the aerospace manufacturing industry, has placed emphasis on the semiconductor industry for the past several years, and, in addition to MRC, plans to offer other semiconductor equipment companies final assembly and test application services in Congers.

- Christine Lunday, WaferNews