Novellus exec sees the silver lining

Goh: During a downturn, customers are more receptive to trying out new ways to drive down costs and increase productivity.

Undaunted by reported downturns in the chip industry, Novellus Systems International BV remains optimistic about the growth prospects of the semiconductor industry.

"No one likes a downturn," said Andrew Goh, president of Novellus' operations in Southeast Asia. But, as the adage goes, every cloud has a silver lining. And Novellus sees opportunities on the horizon. "During a downturn, customers are more receptive to trying out new ways to drive down costs and increase productivity. So that works well for Novellus," Goh pointed out.

Indeed, the semiconductor equipment maker is faring well despite the cloud on the horizon. Last month, the company announced that its Vector Express plasma enhanced chemical vapor deposition (PECVD) system had been qualified for production at Singapore-based DRAM maker TECH Semiconductor.

Hitting a hundred
Also last month, the company shipped its 100th 300mm tool—Vector Express CVD platform—to China, marking a milestone in the company's growth in Asia Pacific. Wuhan Xinxin Semiconductor Corp. had selected the platform for its new manufacturing facility in Wuhan city.

More than 100 Vector Express tools have been shipped worldwide since its launch a year ago. Goh shared that Vector Express enables device manufacturers to extend PECVD technology to 45nm and beyond with lower costs than previous generations.

The Semiconductor Equipment and Materials International (SEMI) predicts that the wafer processing equipment market in Southeast Asia would grow at a rate of more than 7 percent this year.

With the region's promising market, there is no reason for the semiconductor equipment maker to lose confidence. "Southeast Asia's projected growth is good news for Novellus, since we are well positioned in the region," Goh said. "Foundries in the region have reported high utilization."

Singapore alone continues to be a high-growth area for semiconductor manufacturing, as new fabs are born and existing fabs expand. Moreover, SEMI estimates that China will continue to grow as 180nm to 90nm processes become mainstream.

"Many customers are in transition to produce higher-margin advanced technology products," Goh reported. "Such a move creates opportunities for us to offer fab tools that help them transition to smaller technology nodes in a cost-efficient manner."

In a company press release, Tom Caulfield, executive VP of sales, marketing and customer service at Novellus, revealed that Southeast Asia is expected to be a "growth region for semiconductor manufacturing in the coming years, driven largely by memory manufacturers."

Rise of consumer spending
Goh also sees other growth prospects. "If we look back to the early days of the semiconductor industry, demand was largely driven by military applications," he shared. "In later years, corporate IT became the primary driver."

However, diversity has conquered the industry. "Over the last few years, we have seen a shift where the demand is becoming more diversified, and consumer spending on electronics has now become a key demand driver as well," Goh observed. He expects the demand to grow further, "as the volume of semiconductor content increases in health care, medical devices and as semiconductors find their way into new types of applications."

"In addition, we expect strong consumer demand for cellphones, gaming devices, PDAs and computers to continue," Goh shared. "There are also vast parts of the world where penetration of these devices is extremely low and likely to expand rapidly."

Prudent product development
And in its effort to help customers bring devices that the market demands, Novellus uses "several different ways to create new products," just like any prudent company. "We have a strong R&D team working on advanced technology, which in recent years has created tools like Vector Express," Goh explained.

The company's team has also developed new tools, such Vector Extreme, in response to customer feedback. Goh added that Novellus also makes acquisitions when it feels this is the best option. "We will continue to leverage our R&D team to offer products that meet our customers' needs," the executive said. "I believe we are well positioned to do so."

Hence, despite last year's rumors that Novellus was mulling a private-equity buyout, the regional president commented, "As a company, we do not speculate on rumors." He even underscored Asia's importance in the company's roadmap: "My goal is to strengthen Novellus in Asia Pacific and work with customers in the region on technology advancement, productivity enhancement and lower cost of ownership for their fab tools."

Rain or shine, the company remains bullish and adaptive to the changes in the industry. "Our industry has always been cyclical, and dealing with this is key to success in the semiconductor industry," Goh said.

- EE Times-Asia