Don't expect wild upturn in IC-equipment, says Genus CEO
By Mark LaPedus
Silicon Strategies
02/10/2004, 4:50 PM ET
SUNNYVALE, Calif.--Don't look for a wild upswing in the chip-equipment market this year despite improving demand in the segment, according to the top executive at atomic layer deposition (ALD) equipment specialist Genus Inc.
William Elder, chairman and chief executive of Sunnyvale-based Genus, also said the worst is finally over for the semiconductor equipment market, following what is considered the steepest downturn in the history of the IC business.
"Certainly, we've seen the worst of it," Elder said. "I've been through seven downturns, but this was the worst than the prior six combined," according to the semiconductor equipment veteran in a recent interview with Silicon Strategies.
Looking into his crystal ball, Elder does not see a major spike in terms of overall fab-tool growth this year. Instead, the IC-equipment market is projected to grow at a more conservative rate of approximately 20 percent in 2004 over 2003, he said.
"I don't think the industry will grow 60 percent this year," he said. "I find that difficult to believe."
Elder said he would be happy to see 30 percent growth and less volatility in the segment. Indeed, the market has seen its share of boom-to-bust cycles with little or no middle ground. "I would rather see steady growth in the market," he said.
The Genus executive's forecast is slightly more conservative than other projections. VLSI Research Inc., for example, said the chip and fab-tool markets are projected to grow 32.8 and 40.1 percent, respectively, in 2004 over 2003.
Another forecaster, Gartner Inc., said the IC and chip equipment industries are expected to grow 20.1 and 35.9 percent in 2004 over 2003, respectively.
On the other hand, the chip-equipment supply chain is under extreme pressure, as many fab-tool vendors are fully booked until the fourth quarter of 2004, according to a recent report from VLSI Research. At the same time, many chip-equipment makers are seeing an order slowdown due to a lack of production capacity in the marketplace, warned VLSI Research (see February 2 story).
All agree that much of the fab-tool growth is coming from one region. "Most of the new fabs are coming from Asia," Elder said. "A lot of the growth is coming from Asia."
Indeed, the silicon foundries are beginning to move ahead with capital spending after a lull. For example, Semiconductor Manufacturing International Corp. of China is looking to spend a whopping $1 billion in new equipment this year (see February 2 story).
Another driver is new technologies like ALD. "We're optimistic at Genus," he said. Chips made with ALD tools are gradually moving into production at the 130-nm node, with a larger adoption for the technology expected at 90- and 65-nm, according to the executive (see February 9 story).
Separately, Genus today (February 10, 2004) said sales for the fourth quarter of 2003 were $15.3 million, compared to net sales of $11.3 million for the same quarter of 2002. Sales were $56.9 million in 2003, compared to $39.8 million in 2002.
The net income for the fourth quarter 2003 was $268,000, or $0.01 per basic and diluted share, compared to net loss of $2.7 million, or minus $0.09 per share, in the same quarter of 2002. The net loss for the twelve months ended December 31, 2003 was $3.5 million or minus $0.11 per diluted share, compared to a net loss of $11.6 million, or minus $0.43 per share, for the twelve months ended December 31, 2002.
"We are beginning to see signs that the prolonged recession in the semiconductor equipment industry is over, with 2004 expected to be a growth year for the industry," Elder said in a statement. "Genus' revenues grew over 40 percent in 2003 and ALD technology continued to gain traction in the semiconductor and data storage markets." |
