PAUL O’SULLIVAN - TRIANT TECHNOLOGIES - (TNTTF.OB)
CEO Interview - published 03/19/01
DOCUMENT # LAY210
PAUL O’SULLIVAN was appointed President and Chief Executive Officer of Triant Technologies Inc. in June 1998, and has been an officer of the company since 1987 and a Director since 1991. Mr. O’Sullivan’s strategic vision is to build a global company centered around its sophisticated data analysis technology. Prior to joining Triant, Mr. O’Sullivan was a manager for Geosource (Canada) Ltd., and was responsible for the design and development of control systems to run engines on alternative fuels. Mr. O’Sullivan is a member of the Institute of Electrical and Electronic Engineers (IEEE) and the Society of Automotive Engineers (SAE) and holds a Diploma in Electrical and Electronic Engineering from Trent Polytechnic in the UK.
Sector: Application Software
TWST: Could we start out with a little history and a quick overview of Triant?
Mr. O’Sullivan: We have more than 15 years’ experience in developing and delivering equipment monitoring solutions. Our focus is on the semiconductor industry, and our mission is to provide innovative software solutions that increase the productivity of our customers’ wafer processing equipment. Our customers include many of the world’s top semiconductor manufacturers, and we have a value-added reseller agreement with Applied Materials, that is also a shareholder of Triant.
TWST: How big is the market that you’re addressing?
Mr. O’Sullivan: Triant’s solution fits into the overall category of advanced process control, or APC. We believe at this point that APC is still an emerging market, but if you look at the number of existing fabs worldwide that could potentially benefit from an APC solution and couple this with requirement of APC in new fabs, especially 300mm fabs, then we believe the potential is measured in terms of hundreds of millions of dollars.
TWST: Who are you competing with in this space?
Mr. O’Sullivan: Companies that offer a broad but relatively shallow APC solution. So there are a number of smaller players and some medium sized players in this market. There is also a host of very, small companies that service either a single customer or a very narrow market segment. There is also some, although it’s quite small, competition from the fabs themselves that may have developed an internal solution. These internal solutions though tend to be quite simple.
TWST: Where do you stand in terms of your competitive position today?
Mr. O’Sullivan: We believe we’re very well positioned. Our solution is deployed in five of the top 10 semiconductor manufacturers around the world and we are acknowledged as having the best equipment health monitoring technology available today.
TWST: What are those competitive advantages?
Mr. O’Sullivan: Certainly, our technology is a key competitive advantage. Also our network of global distribution partners and our customer-focused approach is a key competitive advantage. We also believe our relationship with Applied Materials is very significant.
TWST: What is it about your technology that sets you apart?
Mr. O’Sullivan: We have a very sophisticated and unique equipment health monitoring technology that’s able to tell whether complex equipment is operating normally or not. It can detect, very early on, problems with equipment that could lead to a significant impact on wafer production and equipment downtime.
TWST: Does anybody have anything similar in the marketplace?
Mr. O’Sullivan: Because of our unique technology, we do not believe we have any direct competition, but there are other more conventional statistical approaches that people have used to some success. However, we believe we’re the only company that has a very unique model-based approach to equipment health monitoring.
TWST: As we look out over the next year or two what’s going to be the company’s strategy to get this effectively into the marketplace and broaden your market position?
Mr. O’Sullivan: Triant’s goal is to become a standard, best-of-breed, equipment health monitoring solution for the semiconductor industry. We believe that working with our customers to deliver the solutions they require and working with our global partners and our OEM partner will be key to success in the APC market.
TWST: Are you positioned today to do that?
Mr. O’Sullivan: We believe we are well-positioned. Our health monitoring technology is unique, our solution is deployed in large numbers with key customers around the world. We have global distribution partners able to sell and support our solution and we have significant financial strength. As we have mentioned, we have an important OEM relationship with the world’s largest OEM in the semiconductor business.
TWST: What will be the impact on you of this slowdown in the semiconductor industry?
Mr. O’Sullivan: It’s very hard to predict what the impact will be as the APC market is still an emerging one. There are two schools of thought however. One school of thought is obviously the standard one where budgets will be impacted and deployments may get pushed out. The other school of thought is that the slowdown may actually accelerate the deployment of APC solutions like Triant’s. APC solutions have the potential to significantly improve equipment productivity and lower manufacturing costs. As a slowdown happens, the focus shifts from building new fabs to getting more and more out of existing fabs, and our solution is a solution that can help achieve that.
TWST: Have you seen any signs of a downturn on your business yet?
Mr. O’Sullivan: Given that the APC market is still an emerging market, we haven’t seen anything significant at this point. We do know that that whenever a downturn happens budgets are looked at more carefully and, of course, it’s possible that budget approvals may get delayed. However, to date we haven’t seen any significant impact from the current industry slowdown.
TWST: For customers looking at the product, what can they expect in the way of cost savings or productivity improvement from you?
Mr. O’Sullivan: That is very customer dependent. Our customers view our solution as giving them a competitive advantage. Our solution is a productivity enhancement tool. If it’s used effectively and intelligently it can provide significant cost savings. For example, one of our customers, AMD, has realized more than an 80% reduction in scrap on a particularly critical process by using our solution. Another one of our customers, Motorola in Scotland, has used our solution to reduce qualification times on certain equipment, from two hours per day to two hours per week. Finally, one of our customers in Asia, a D-RAM manufacturer, has deployed our solution on many hundreds of pieces of equipment in three of their fabs and plans to deploy it in a fourth fab. When you consider today that a typical piece of semiconductor equipment may have an overall equipment effectiveness, or productivity ratio, of somewhere around 50%-60%, there are significant opportunities for cost savings and productivity increases by making the equipment more effective.
TWST: Is there any way to benchmark what improvement people should see with your equipment?
Mr. O’Sullivan: Yes. If fabs already have the ability to measure, for example, amount of scrap, non-product wafers, equipment downtime, overall equipment effectiveness, etc. then it’s possible to perform a “before and after” comparison. We deliver a best-of-breed equipment health monitoring solution and form strategic alliances with other companies that have best-of-breed solutions in the other two areas of the APC market, namely, OEE monitoring and run-to-run control, thereby providing a path for our customers to deploy a complete best-of-breed APC solution.
TWST: Is there an agreement you have today of that nature?
Mr. O’Sullivan: We are actively working on these types of strategic alliances and, as we have mentioned, we have a VAR agreement with Applied Materials.
TWST: Is that the type of thing that you want to continue?
Mr. O’Sullivan: Yes. We believe that the OEMs are very important in introducing APC solutions to the marketplace. We believe that, eventually, APC solutions will be built into the equipment itself and will not necessarily exist outside the equipment. We’re a ways off from that today, but we believe it’s a trend that’s going to emerge as the industry moves forward.
TWST: As we look out over the next year or two, will there be further refinements to the product line, or are you satisfied with where it is now?
Mr. O’Sullivan: There will always be refinement. For one thing, you have to stay ahead of your competition if you are to remain a market leader. In serving any emerging market with a new type of product you always have first generation products, second generation products and so on, and so you have to continue to invest in product development. One of Triant’s strategic objectives is to maintain our technical leadership in our core technology. We do believe that our technology sets us apart and makes us unique and that we have to continue to maintain that leadership. Also, we have a very comprehensive product roadmap that has been driven by our customers and we will continue to execute on our roadmap to deliver solutions that meet our customers’ needs.
TWST: For investors keeping an eye on Triant, what should they use as milestones or benchmarks to judge you over the next year or two?
Mr. O’Sullivan: What we see as one of the key drivers would be the accelerated fab-wide deployments of APC solutions by major semiconductor manufacturers. We believe that as we start to see the APC market emerge more fully, and as we start to see accelerated fab-wide deployments from major semiconductor manufacturers, this will signal significant growth potential.
TWST: In terms of growth expectations for the next two or three years, what goals have you set for the company?
Mr. O’Sullivan: In terms of growth, we obviously are planning for significant growth. One of the difficulties in any new emerging market is to be able to accurately predict when the growth is going to reach an exponential rate. We believe Triant has the financial strength and market positioning to take advantage of this growth when it happens, which we believe will be over the next few years.
TWST: Is there going to be some single thing that gets the market to take off?
Mr. O’Sullivan: I don’t think it will be a single event that will cause the market to take off. I think it will be more a confluence of events such as executive-level commitments to make existing and new fabs more productive using APC solutions, more and more success stories emerging on the benefits of APC, APC products that can be deployed fab-wide and are easy to use, etc. One interesting thing that we’re starting to see a little of is what we call the fear factor. That’s where a customer sees their competitor introduce an APC solution, and for fear of losing competitiveness they also start to investigate and adopt an APC solution. We’ve seen this happen, and this could well help drive the accelerated adoption of APC solutions.
TWST: Looking at the bottom line, when should investors expect you to begin generating a reasonable amount of profit?
Mr. O’Sullivan: That’s something that at this point we do not publicly comment on. We do see that the market is going to continue to accelerate the deployment of APC solutions in 2001 and beyond and Triant has to continue to invest in this market. Fortunately, we have the financial resources to do so.
TWST: Do you have the management team in place to continue to move this company forward?
Mr. O’Sullivan: We believe we do. We have a strong Board and a strong executive management team and a company culture that rewards success.
TWST: Looking at the balance sheet, do you have the funds available to get you from here to profitability?
Mr. O’Sullivan: We do. If you look at our financials you’ll see that we have more than $20 million in cash and we have maintained that cash position since June of last year after completing a significant financing. We believe that we have the funds sufficient to take us to the next level in terms of taking advantage of the opportunities in the semiconductor market.
TWST: Are there any other businesses that you want to be in, or is semiconductor really the key focus at this point?
Mr. O’Sullivan: Today the semiconductor industry is our key focus. Our core technology can be applied to other markets. From a long-term point of view, we do see moving into other markets with our technology, but today, the company is focused on the semiconductor market.
TWST: What other markets can this be used in?
Mr. O’Sullivan: There are several other markets for our technology. For example, there are some initiatives that we’re working on in the area of human factors. There are also other industrial types of markets, such as pulp and paper, petrochemical, aerospace and even military. What we have is a unique technology that can be applied to a broad range of industries where sophisticated data analysis techniques are required. However, the semiconductor market is where our focus is today.
TWST: Do you think that the market understands what you’re trying to do?
Mr. O’Sullivan: I think the market understands that what we do is to improve the productivity of manufacturing equipment in the semiconductor industry. What I don’t think the market understands is how long it takes, and how hard it is, to introduce new technology into the semiconductor industry. The semiconductor industry is the most complex manufacturing environment on the planet and as such it has some unique challenges.
TWST: Do you think that you’re being valued appropriately today?
Mr. O’Sullivan: We feel that we’ve been hit generally by the downdraft in the semiconductor and tech markets. We don’t believe our current valuation takes into account the opportunities that are facing us, the uniqueness of our technology, the impressive list of customers and strategic partners that we have and our financial strength.
TWST: Is it mainly the general concerns about the semiconductor business that’s hurting you, or is there some concern about your product line?
Mr. O’Sullivan: We don’t believe that there are any real concerns about our product line. We have some impressive customers and we have a very important OEM relationship. What we believe is that it’s a new and emerging market in a very complex industry that’s not easily understood by the average investor. When you take into account the general nervousness and up and down nature of the high tech and semiconductor markets, then it’s not surprising that companies like Triant are hit by the market swings.
TWST: If you were sitting down with some potential longer-term investors today, what two or three summary reasons would you give them to go out and invest in your company?
Mr. O’Sullivan: I think you have to look at the significant market opportunity for our technology; you have to look at who our customers and strategic partners are; you have to also look at our unique technology and our management team; and you have to look at our financial strength. Then you can make an informed decision.
TWST: Thank you. (TM)
PAUL O’SULLIVAN
President & CEO
Triant Technologies Inc.
20 Townsite Road, 2nd Floor
Nanaimo, British Columbia V9S 5T7
Canada
(250) 754-4223
(800) 663-8611 - Toll-free
(250) 754-2388 - FAX
www.triant.com
e-mail: mail@triant.com
twst.com
Jim |
