INDUSTRY NEWS

New name, familiar tools: Aviza Technology enters the thermal process market fray

T he company name may be new, but the products, brands, and executives are very familiar. Aviza Technology, created through a $50 million investment from VantagePoint Venture Partners in October, has acquired ASML's thermal unit from the Dutch lithography equipment company. As a result, thousands of Thermco, Watkins-Johnson, Silicon Valley Group, and ASML deposition and oxidation tools installed worldwide make up the Aviza equipment lines.

Aviza's Jerry Cutini

Company president and CEO Jerry Cutini sold SVG furnaces in the 1980s; he cofounded and eventually sold OnTrak Systems to Lam Research before going on to other industry positions. He leads a management team peppered with recent and former employees of the companies in Aviza's pedigree.

"We're back where we started, almost," jokes Cutini from the company's Scotts Valley, CA, headquarters. But he points out a significant difference this time around. "After 30 years, the company is finally dedicated to this business—it's not a piece of something else. I think that will be a significant advantage for us. Our competitors have a variety of problems and products on their hands, where we're singularly focused on thermal processing."

Aviza faces tough competition from Applied Materials, Hitachi-Kokusai, TEL, ASM International, Mattson, and Axcelis on the traditional thermal side, as well as from Genus, ASM, Applied, and others in the atomic layer deposition (ALD) part of the business.

"They're going to have to execute on their blocking and tackling and get back to serving the customer base that they had, and performing for those customers," notes Dean Freeman, a principal analyst for Gartner Dataquest. Citing the increased use of rapid thermal process technologies in source drain anneals and other advanced applications, the analyst sees erosion in some of Aviza's core markets. "They have to find a way to gain market share in the segments that are going away. They do have a high-k product [with their ALD tools], but that market is already fairly crowded, so they're going to have to make some reasonable penetration there and show that they either have a lower cost of ownership or a better mousetrap than the other guys."

ASML's two-year-plus ownership tenure leaves Cutini with a mixed bag of challenges and opportunities. "I have to be a little careful here. They had done a very good job in their investment in ALD technology, even though they knew they would be releasing the division at some point. Where they didn't act enough is that they didn't put in enough infrastructure to handle this upcoming turn in business. They tried to make it live in a sustaining mode, and you know how our industry is: you have to keep reaching forward in order to stay on top."

Freeman's assessment of the situation is more blunt, but he sees room for optimism. "Basically ASML has been neglecting the business [since they bought it as part of the SVG deal in 2001]. They pretty much neglected any market they had out there, and you could see this in their decline in thermal market share.... As we're starting to emerge into an upturn again, actually the timing [for the spin-off] is pretty good. If the group can put together a good sales strategy and good account strategy and win some of their accounts back based on their historical performance, they have a chance to hit that $100 million [in annual revenues] that Jerry has talked about."

Cutini's team is focusing on three key items over the next six months: sales, field service, and 300-mm capability. "The first and foremost action item is to rebuild an international sales team. I'm bringing them on right now, and we're going to start working on our interactions with the customers.

"We're also working on stabilizing the international field service organization and rebuilding the logistics activities out in the field so we can support the customers. We've taken on well over 100 field people in seven or eight countries. We're reintegrating them with the factory, because under the ASML tutelage they were involved in Veldhoven [in the Netherlands], not in Scotts Valley.

"We will be engaging with a large contract manufacturer to help us build our 300-mm products—that is the third-most important thing that I'm doing right now. We're adding capacity inside our factory and we're adding an outsource capability that will be helping us build the first run of these machines, but then later on they'll be able to do it themselves. At some point in the future, they will take over the bulk of our capacity, more than 50%."

Cutini is a proponent of an OEM equivalent of the fab-lite strategy adopted by many chipmakers. "I believe that an equipment company has to maintain its expertise in rolling tools from development into beta-phase manufacturing and maybe some low level of capacity. But when you start flexing your capacity, you need to rely on an outsource vendor."

The industry veteran says he's spending most of his time internally on "getting the company organized so we can deliver on some of our 300-mm commitments." He estimates that Aviza has "40 to 50 300-mm furnaces in the field," all in Europe at this point, and adds that "we have a number of deliveries in the first two quarters of next year...of 300-mm tools into Taiwan and China."

Aviza's Pantheon ALD system is another key component of the company's future prospects. "We have licensed technology from a Korean company, IPS, which has a large installed base in Samsung. We are starting to put tools in Europe, Japan, and the United States. We are actively getting orders for ALD. (Although) ALD is not being adopted as fast as everyone said it would, it's clear that ALD will be a critical technology at some point in the future....The real question with ALD is not whether the customer will use ALD, it's what film will they use. So in a sense we're in a materials development mode, because we're trying to figure out what the customer wants."

Despite the challenges of having to reorganize the company while ramping production, Cutini says Aviza has "an opportunity to grow regardless of how the equipment sector on a macro view grows. If we can execute, we can grow market share without the overall market growing."

The company head explains that growth through acquisition is also part of Aviza's game plan. "We are actively looking out there and seeing what technologies we think we want to bring in. VantagePoint has made it very clear that this is not a single-play investment. I've been telling them for quite some time that you have to view it as a multistage investment because you need to get more critical mass than any one product line can offer you and a bigger footprint in the fab....Everybody in this industry has been talking about consolidation, and we're going to go do it." —TC

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