For future reference, here is the interview:
CURTIS WOZNIAK - ELECTROGLAS INC (EGLS)
CEO Interview - published 03/23/2000
DOCUMENT # JAP205
CURTIS WOZNIAK joined Electroglas, Inc. as CEO in April 1996. In
August of the following year he was named Chairman of the company.
Founded in 1960, Electroglas, Inc. is a world-leading supplier of
essential process management tools to the semiconductor industry. Prior
to joining Electroglas, Mr. Wozniak was President and Chief Operating
Officer for Xilinx, Inc., the world's leading supplier of programmable
logic. Before Xilinx, Mr. Wozniak spent more than 10 years with Sun
Microsystems, most recently as Vice President, Worldwide Marketing, for
Sun's largest subsidiary, Sun Microsystems Computer Corporation (SMCC).
SMCC accounted for more than 90% of corporate revenues when Mr. Wozniak
departed in 1994. During his tenure with Sun, Mr. Wozniak also served
as Vice President, Engineering for SMCC, responsible for development of
all of Sun's hardware products and engineering operations in Mountain
View, California; Boston, Massachusetts.; Research Triangle Park, North
Carolina; and Tokyo, Japan. Earlier roles at Sun included Director of
Manufacturing; Vice President, Desktop Graphics Development; and Vice
President and General Manager of Sun's Educational Products Division,
where he was responsible for the development of SPARCstation products.
Before Sun, Mr. Wozniak spent several years as Production Engineering
Manager for Hewlett-Packard Co. He began his career at General Motors
Corp., where he spent nine years in a variety of manufacturing,
marketing and operations roles. He holds a Bachelor of Science degree
in Mechanical Engineering from GMI Engineering and Management Institute
(now Kettering University) and a Master of Business Administration from
Stanford University. Mr. Wozniak serves on the Board of Directors of
the Semiconductor Industry Suppliers Association of America (SISA)
(formerly SEMI/SEMATECH), a consortium to strengthen the semiconductor
supplier industry, and the Kettering University Board of Trustees.
SECTOR: SEMICONDUCTOR EQUIPMENT
TWST: Give us a brief overview of Electroglas.
Mr. Wozniak: Electroglas has been in the semiconductor equipment
business for about 40 years, and was spun-off by General Signal in 1993.
Our primary business over those years has been in the wafer prober area;
a prober is a piece of equipment used to test silicon wafers before
they're cut apart and sent out to be packaged. Over the last couple of
years, however, we've been working to broaden that product line through
a couple of acquisitions in 1997, one in inspection and one in yield
management software in order to provide a whole set of process
management tools, including our wafer probers.
TWST: Are you contemplating further acquisitions, mergers, joint
ventures, partnerships those kinds of things?
Mr. Wozniak: Yes, all of those joint ventures, partnerships. We've done
an equity investment and strategic partnership with Cascade Microtech to
broaden our prober technology. We continue to look for partnerships with
test companies in order to do a better job of integrating our wafer
probers. In our yield management area we are always working with other
companies to increase the capability to bring data into a common yield
management system. In terms of acquisitions, we continue to look for
good acquisitions that fit that overall strategic direction and can add
to our bottom line.
TWST: How do you think your R&D expenditures will change in the future?
Mr. Wozniak: We have significantly ramped up our R&D expenditures over
the last couple of years since 1996, to the point that they're running
at a pretty good rate of revenue, about 12-15% of revenue now. And we do
expect to continue to ramp those as our revenue grows. We're in a
technology business. We have to create new products and new technologies
for our technology-advanced customers, and that requires a lot of R&D
investment. One of the significant things is that we need to continue to
invest in, even somewhat independently of the business conditions of our
very cyclical industry. So we have to keep the R&D motor turned on
regardless of the environment.
TWST: What are the most significant trends, developments, changes and so
forth that you anticipate in your marketplace over the next several
years?
Mr. Wozniak: There are a couple of them. Probably the biggest one that
people know about is the transition to larger wafer sizes. We're in the
midst of a move from 200-millimeter size wafers to 300-millimeter size
wafers, which generates over twice the area for semiconductors on the
wafer. Of course, that's a big change for us, because all of our old
equipment, current equipment really cannot be used for those larger
wafer sizes. That will drive a whole new generation of equipment across
the board in the semiconductor industry. So that's one major change. The
other major change is continued new technology coming into
semiconductors. Semiconductor companies continue to shrink devices which
adds more complexity to a chip, more testing, more technical features
that are required by us in order to align and touch down on those very
sophisticated dies. So there is continued technological change going on
there. The final one really comes in how semiconductor manufacturers are
running their manufacturing processes. Wafers have been run pretty much
as a batch, almost a cooking, kitchen-style process over the years. One
of the trends that we see is the whole impact of better data management
and process management tools coming into the fab. And really utilizing a
lot of the technologies that are now available on the Internet, that are
used to drive the Internet, could be used in the manufacturing fabs to
drive manufacturing. But today they're not, so that's one of the reasons
we see data management and information processing as a huge opportunity.
TWST: What are some of the greatest opportunities for the company in the
next several years?
Mr. Wozniak: One of them is testing at the wafer level. People have
been somewhat limited by technology at the wafer level. As the tester
companies, people like Teradyne, Credence or Schlumberger, do better
wafer level testing, customers will try to do more testing, and that
will drive use of wafer probers. Another major opportunity we have is
just faster deployment of the yield management software we provide; as
people recognize the advantage of bringing better data management tools
into the fab. In our inspection business, one of the biggest
opportunities is the trend of getting away from using wires to connect
the chips to packages and using little solder bumps that all have to be
geometrically correct. The ability to inspect those is an opportunity
for us.
TWST: What are the major concerns or risks that the company faces now
and will also be facing in the future? Does anything keep you up at
night about the company?
Mr. Wozniak: Yes, a lot of things keep me up at night, one of which is
while we're in a very good growth business, the semiconductor business
is still a cyclical business and tends to go up and down rapidly. Trying
to keep your eye out and see where those ups and downs are going to
occur does keep you up at night all the time. The other thing is, as I
mentioned, we're a technology company. We really focus on getting new
products done, and our ability to get new products out the door in time
with these cycles is always a risk and one of the things that keeps us
up at night. The final thing is that the semiconductor industry is
really going global, and being able to put in place a worldwide
distribution and support network is one of the things that we continue
to strive for. We're very strong in our support network in the US and
Europe, and we're continually trying to improve our support and service
and sales network in Asia.
TWST: What are some of Electroglas' competitive advantages? What sets
the company apart?
Mr. Wozniak: In our wafer prober area, which we've been in now for
probably 30 years, the overall flexibility of our system is one of the
things that customers really like. When customers have a large variety
of devices that they have to test, the ability of our software system to
accommodate that variety is a strength of ours. We have two brand-new
systems that we introduced last year and are going to be shipping this
year. One is called the EG4|200, which has extremely good mechanical
rigidity. This helps in testing very big devices, and a lot of the new
chips are getting bigger and bigger. People are trying to test more at
the same time, so they're trying to test 32 devices at once, and
mechanical rigidity is a very important feature. Our 300-millimeter
product, the EG5|300, which was also introduced last year and we'll be
shipping this year, has very good accuracy and throughput. So in our
prober area these are two strong advantages. In the yield management
area we have very good coverage of a broad set of data sources to bring
into our database, allowing a customer to analyze how different pieces
of equipment have worked together to cause defects. So really the
coverage is our strength there. And finally, in our inspection business
we have brought some very high speed, high resolution technology to an
area of the manufacturing process that hasn't been able to utilize that
level of technology before. They still use a lot of people looking
through microscopes in order to find defects, and our inspection
equipment automates all of that.
TWST: You kind of touched on this, but any opportunities for improvement
within Electroglas? Any weaknesses that need to be addressed?
Mr. Wozniak: Yes, two that I mentioned. Getting products out faster is
always a challenge in a technology and we're no different in that
regard. Getting our products done is probably our number one challenge.
Strengthening our channel in that Asia market is something we need to
work on, too. And finally, just broadening our product line. We need to
have a very good, strong, broad integrated product line for the changes
going on in the marketplace. So continuing to expand both through
internal development and acquisition.
TWST: What are your specific goals for Electroglas over the next several
years in terms of such factors as market position and growth?
Mr. Wozniak: Our major goal in our primary business is to gain market
share in wafer probers. We compete against two very good Japanese
competitors. There are only three of us in the marketplace, and our goal
is to gain market share through technical advantage. So that's our
number one goal. Our second major goal is to expand the business in new
product areas, such as the process management tools I discussed, in
order to have a coherent strategic vision that allows customers to see
where we're going. And finally, we want to grow faster than the
semiconductor equipment market, whatever that is. It's a cyclical
business but it's a growth business, and we want to grow faster than the
rest of the market.
TWST: How do you feel about your current stock price?
Mr. Wozniak: Pretty good, yes! You know, it's a pretty good stock price
relative to where it was 52 weeks ago or just before that, so we've had
a pretty good run, as a lot of technology companies have. If the
expansion in the economy continues and continues to drive semiconductor
demand, the semiconductor equipment market is forecast to double over
the next four to five years. So given that environment, it's a pretty
good bet, and we have excellent financial leverage.
TWST: If you were sitting down with a group of potential long-term
investors, what two or three reasons would you give them to invest in
Electroglas now?
Mr. Wozniak: The first is that semiconductor equipment is a growth
market. It's growing at 15-17% per year. On a long-term basis, it's
expected to grow in excess of 20% for the next two to three years. But
it is a cyclical market, so it does take the tolerance of a long-term
investor. Electroglas is very well-positioned for both our existing
markets and new markets that we see coming into the business. And then
finally, we've had a very good history of maintaining a very strong
financial backbone. We are cash rich, we manage our assets very well,
and have good financial discipline. So we keep a strong eye on the
books, in addition to trying to move into expansion markets.
TWST: Thank you.
CURTIS WOZNIAK
Chairman & CEO
Electroglas, Inc.
6024 Silver Creek Valley Road
San Jose, CA 95138
(408) 528-3000
(408) 528-3542 - FAX
Each Executive who is the featured subject of a TWST Interview is
offered the opportunity to include an Investors Brief or other highlight
material to be provided and sponsored by and for the company.
This Interview with Curtis Wozniak, Chairman & CEO of Electroglas, Inc.
is accompanied by an Investors Brief containing corporate information.
Copyright 2000 The Wall Street Transcript Corporation
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