I do not know if this was posted yet here, and it probably was, but I thought the readers of this thread would like to view another summary from a SMIF "pioneer"
I did not post the highlights of the ASYT Conference Call yesterday or the replay number.
(Toll call 615-770-7202) - I remain extremely bullish on ASYT.
1. They have 10 fab projects in Asia over the next year for order releases. A project is either a factory upgrade/retrofit or new construction. These projects will run in the neighborhood of $10 million. A project includes installing mini environments and wafer handling equipment. The long and short of this is a minienvironment is just what it looks like. In layman's terms, think of an operating room. There you are in this large room with all the equipment, people and instruments. The entire room needs to be kept clean to prevent infection and then you have the huge light over head, which is partially UV to kill airborne contagion. Well, imagine if somehow, an ultra clean and sterile environment (enclosure like a glove box but not as confining) could be created that envelops you within a 3 foot radius. This creates a miniature environment, which can be kept much more sterile and would reduce the overhead costs of keeping the entire room clean. This is exactly what a SMIF minienvironment does. It will allow you to minimize the ultra-clean portion of facility in order to manufacture sub-micron particles. Over the last years, these minienvironments have moved from stand-alone units to being incorporated into the footprint of the equipment itself. This, by the way, is my area of special expertise, being one of the pioneers in implementing this technology.
BTW - As an example of what all of this means, you should know that if I needed emergency invasive surgery, I would prefer to be laid out on a work surface in an IC fab than in an operating room. The IC fab environment, while maybe not good enough to do 0.18u technology without mini-environments, is most certainly much cleaner than a standard operating room.<G> Mini-environments makes them even cleaner. There is only so much that can be done to minimize human contamination and contamination from the equipment and the fixtures themselves. The ULPA (Ultra Low Particulate Air) filters have contaminants that spew out during the natural course of operation due to the decomposition that takes place from the air they are filtering. I digress, so we go back to the point.
Wafer automation equipment are nothing more than sophisticated wafer transfer tools that get the wafers from one part of the process to another or from one piece of equipment to another. The integrated indexer, which is growing in numbers, is an automated wafer indexer that is built into (OEM'd) many process tools and replaces the conventional wafer indexers. The SMIF (Standard Mechanical Interface) port plate is part of the equipment and indexing system. The port plate is a standard surface that allows commonality of entrance and exit for a wafer transport unit that protects the internal wafers from the ambient environment (POD).
Think of it this way. Remember the older Pioneer "6 pack" CD players. The CDs are protected in the plastic 6 pack case, allowing the transport of 6 CDs at a time. That 6 pack is the equivalent of the wafer POD. Now, the slot the 6 pack fits into and the mechanism that transfers the CDs into the unit itself could be considered the integrated indexer. This is the SMIF version. The non-SMIF'd version would be the fifties style juke box with the 45 records, without the front glass cover. Analogies are not my forte but this is as close as I can give for a visualization.
2. Improving order pattern. It has taken more than 10 years for SMIF technology to go main-stream and gain market acceptance in the way it has. This might have finally happened with the 0.25u and below wafer processing. This is probably more for contamination control within the fab environment than from the ambient environment. By this we mean contamination caused by the contamination control equipment within the fab environment, along with the pumps, persons, work surfaces, etc. Whatever the case, as geometries shrink, defect densities increase if upgrades are not made to eliminate contamination at the most microscopic levels. When facilities upgrade or retrofit for improved "controls", ASYT is getting a larger portion of those projects and is seeing orders from more companies. This may cause ASYT to fall into one of their most notorious modes, "More business than they can handle". While it sounds good, it is really bad. Certain resources could not be stretched to the limits, to accommodate all the projects.
3. Moving from 30-40% penetration into a fab being retrofitted to over 80% penetration with products. Look at this like the silicon content in automobiles. 15 years ago, they were hardly found in the car and now they make up a significant amount of the cost content. (air bag sensors, electronic dashboards, sensors, audio electronics, etc.)
4. OEM business picking up as new equipment orders lead to orders from ASYT for Integrated Indexers. ASYT has more than 200 OEM users for their automation wafer handling equipment and integrated indexers. As orders pick up in the industry for more process equipment, this will translate to orders for ASYT for these OEM units which will be placed in the equipment. The SMIF option is becoming standard equipment in new process tools. These same tools can be sold to customers who do not use SMIF technology. The port plate can accept the wafer cassette without the wafer POD. As a matter of fact, the integrated indexers are a viable and cleaner transfer mechanism than what previously was used in these process tools. And some of these tools now have standard mini-environments that can be shipped from ASYT through many OEM arrangements and collaborations. We know this to be true from personal experience, since we designed a few of these enclosures years ago.
5. Asia is looking real strong going forward. Asia has always been the leader in implementing the ASYT solution, going back to the mid-to-late 80s. They recognized the benefits well in advance of the US companies. TSM (Taiwan Semicon) was the first company to builds a SMIF fab from the ground up while the LSI Logic facility in Colorado gets the US honors. Taiwan and some Korean companies have fully embraced this technology. With the addition of TXN, along with IBM (a long time user), ASYT is finally gaining prominence within the US industry. We expect to see Japan kick in but we hope that an upcoming contract with Philips will put them over the top. MOT has dabbled with this technology and could be a big boon to ASYT if the Texas Pacific Group (just announced purchase of some of MOT's older semi business units) decides to retrofit those facilities. BTW- this would be one of the smartest moves that could be made by the new owners as it could turn a low margin producer into a more profitable business via the gains SMIFing would achieve.
6. PST close expected prior to 6/30. PST (Progressive Systems Technology) has been a minor nuisance to ASYT over the past few years. The CEO used to work for AMD and decided to go out on his own, after believing he could build a better mousetrap. This was after seeing what was done elsewhere. Over the course of the last few years, they failed to really impact ASYT's business. And along the way, they did design a few novel tools that complement the ASYT product offering. In other words, if you can't compete with them, then come up with something they do not have or that you could compete with them on. Such was the reason for this acquisition. PST developed a few tools that would enhance ASYT's product offering. The acquisition of PST by ASYT makes a good deal of sense form this perspective.
7. TXN $20 million will be booked over the next few quarters and is not part of the $33 million backlog. This gives some perspective of how large some of these projects can be. It also helps to defray some of the negativity surrounding the recent financials released. When you look at the raw numbers, you will see that it will not take too many projects or OEM orders for units, to turn the tide rapidly.
8. Reticle management from PST expected to have some significant orders. As we mentioned above, these reticle management tools had real good forward-looking prospects.
9. Asyst is getting more active in Japan but they would not go into details since it is too early in the curve. Personally, and from direct prior experience, this technology is one of the top 3 programs that will have to be implemented for the Japanese to get back into competitiveness. As a matter of fact, their involvement will more than likely refine this technology and bring it to a new level. SMIF is also used as a means of becoming more cost competitive. This is exactly what is needed as DRAM prices remain low.
10. Will prosper in the upcoming 150mm to 200mm conversions. Briefly, most conversions will require new equipment so ASYT benefits from the OEM orders for integrated indexers and enclosures for these tools. For improved processing conditions within the existing fab envelope (improving contamination control and increasing the levels of automation) it is cheaper to retrofit these fabs while still running production than to shut down production for months while the facility is remodeled. KEY POINT to "SMIFing" a Fab: It can be done with minimal interruption of the product flow.
11. Asia Pacific orders are presently at 45% of revenues, mostly in Taiwan for follow on orders, but also good business prospects in Korea. This speaks for itself.
12. Looking to see gross margins reaching 40% levels again as revenues rise and a bit of outsourcing occurs. The belt tightening by ASYT and their new programs to become more cost effective will start to pay off as business picks up and expands.
13. OEM expected to be 32%-35% of revenues for 2000. We have mentioned this already but it bears one more comment. It is our belief that ASYT will prosper more as a company as the OEM part of their business grows.
14. Asyst expects to see 20% growth and then another 20% growth over next 2 quarters without factoring in the PST transaction. PST will add additional sources of revenues for ASYT but the core ASYT business will dramtically improve as more of their automation tools are designed into the next generations of process tools. It will also take off a more and more companies come out of this downturn and realize the competitive advantages associated with this technology.
This is not a solicitation or promotion for ASYT and is brought to you couretesy of RadarView, a financial newsletter I write. The above commentary was included in a previous issue of our newsletter and I thought it would be appropriate to share here. ASYT has always been one of our favorites.
Andrew Vance
RadarView Newsletter
avance@radarview.com |
