End of an Era in MOCVD
November 3, 2003...MOCVD tools have been heavily instrumental in making the compound semi industry the commercial success it is today. Without the keen competition over the years between Emcore Corporation of Somerset, New Jersey USA and Aixtron AG of Aachen, Germany (the industry's two most well-known names in MOCVD equipment), today's commercial marketplace, and certainly the marketplace created under The Bubble, simply wouldn't exist. MBE Systems are great, but most would agree that over the last few years especially, MOCVD has ruled. For sure MOCVD has reigned supreme when it comes to making possible the highly successful GaN LED marketplace. A fleet of one kind or the other of either Emcore or Aixtron GaN tools (in many cases, a mix of both), are what is driving the blue spectrum LED. Emcore's GaNzilla has cut an impressive path throughout the international marketplace since this monster GaN machine was introduced in February, 2001. (Ref. our search results for 3 year archive of Emcore news & editorial coverage).
Virtually all HB-LEDs of every color up and down the spectrum, into the UV which the human eye can't see, and all the white LEDs, (white being just a clever blue spectrum-enabled trick on the eye), are grown by MOCVD. Emcore and Aixtron have been battling back and forth for market share for 20 years and the sales teams of both have become very good at the high stakes, competitive game. At last estimate there were 250 MOCVD tools in production in Taiwan alone, 50 of which were added in just the last year. As Bob Steele of Strategies Unlimited recently pointed out, there are at least 15 providers of GaN chips in Taiwan, and as many as 25 in all of Asia, outside Japan. Some of these facilities have an astounding number of systems in place, and just keep ordering more. Virtually all those suppliers are using a mix of Emcore and Aixtron GaN platforms, and getting results that are starting to rival Nichia, Toyoda Gosei, Cree and Lumileds, which is one of the reasons so many eyes are now on the fast-growing and heavily supported Taiwan and Korean markets. No matter what epi growth camp you're in, (Emcore, Aixtron, "other" or MBE) or a mixture thereof, the state of the art of MOCVD technology has clearly benefited, tremendously, by the commercial competition. White LED might still be in the dark without it.
Will that competitive stature be maintained as TurboDisc tools move under the roof of a horizontal equipment supplier, i.e. Veeco (Nasdaq: VECO) versus the vertical model Emcore provided when veering away from its equipment-only stature in 1995? And where are Emcore and Veeco headed, individually, with the shift? First of all, let the record be reminded that the game has changed already. That's why it's the end of an era. Aixtron's founders have moved up the ladder and out of the mainline action, and Aixtron has broadened its scope into the advanced silicon-based epi busyness. Emcore's original founder and CEO, Norm Schumaker, left Emcore years ago and is now heading a new innovative lithography tool company in Austin called Molecular Imprints.
Emcore's business has shifted steadily over to the epiwafer (HBTs, etc.) and device manufacturing and development side of the business. Approximately 120 people are involved in TurboDisc out of a total current employee roster of 750, 200 of whom are at the corporate headquarters in Somerset. The focal point of Emcore has been in Albuquerque, New Mexico for some time now, fortified by the Ortel group in Alhambra, California. To those who know the company well, this action is logical, especially given what it will take to fuel the next gen Emcore as it confronts the battle of helping broadband communications and advanced solar cells for space applications live up to their promised potential. I have every confidence Emcore can do just that, especially now that it can focus even more strongly on the materials and device side of the business.
Meanwhile, at Veeco, having already integrated a leading MBE supplier into its company folds (the former Applied Epi which it acquired in 2001) can trace its semiconductor product roots back to the Manhattan Project. Spinning off in 1990 to what it is today under the continued leadership of Edward H. Braun, Veeco has become a progressively stronger force in the compounds. With the addition of MOCVD to their product offerings, my guess is that they will quickly become regarded as a major equipment supplier to the industry, if not the major supplier, given that Aixtron doesn't carry a MBE tool line nor the breadth of related instruments. And through their MBE offerings, and under the guidance of Dave Reamer, VP Strategic Marketing and Business Development, Veeco has proved over the last two years that they understand the longterm future of the advanced epitaxy business, and that the field may well include progressively more silicon involvement as an expanded number of advanced devices come to depend more and more on the art of atomic layer epitaxy. Veeco in Minnesota, (Applied Epi) is heavily focused on the convergence of the compounds and silicon. So is Aixtron. And the old argument Aixtron traditionally used when competing for Emcore's customers: "We don't compete with our customers" will no longer apply.
So it's clearly the end of an era, but who knows... the new era the field now enters might very well prove to be even more exciting than the last. It certainly will involve more people and more companies, plus new markets many people can't even fathom. And isn't that what we've had as a goal these last 20 years? To bring the compound semi sector to the attention of the overall semiconductor industry and help them receive their overdue appreciation within the many markets to which the compounds contribute? No more stepchild status! As the compounds dominate some markets, like blue spectrum LEDs, and with GaN electronics coming on fast, and with silicon technologies converging with those enriched by the compounds, the name of the game becomes, simply "Advanced Semiconductors." That's the new era. More people will be involved, creating more and better jobs... (hopefully soon), and an even more robust industry is created that understands and appreciates the dynamics and potential of change.
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