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Downturn puts fab tool market in the red

Posted: 25 May 2009 ?? ?Print Version ?Bookmark and Share

Keywords:fab tool? market downturn? lithography?

This is the worst downturn in the history of semiconductor equipment. Most would agree about that but what individual sector is the worst? ATE, inspection, lithography or wafer cleaning?

They are all terrible, but in my opinion, fab automation is the worst right now. Fab automation includes front-end modules (FEMs), sorters, load ports and automated material handling systems (AMHS).

Fab automation pioneer Asyst Technologies Inc. has recently filed for bankruptcy and is looking for a buyer. It has suffered endless losses and layoffs.

Another vendor, Brooks Automation Inc., has also seen layoffs and losses. Brooks also recently said revenues for Q2 09 were $37.3 million, compared to revenues of $147.7 million in Q2 08, a decrease of 74.7 percent. Sequentially, revenues were down 49.2 percent from Q1 revenues of $73.4 million. Net loss for Q2 09 amounted to $152.5 million.

Meanwhile, it's slightly a better picture at Japan's Daifuku Co. Ltd. Third-quarter sales were up 12.9 percent, but profits were down 30.1 percent. Daifuku sells products in various diversified markets, but I'm sure its cleanroom unit is suffering.

The same is true for Japan's Murata Machinery Ltd. Other fab automation vendors must be suffering as well.

Problem and solution
The problem is that fab automation orders do not come in bunches. A chipmaker standardizes on a fab automation system for a plant. Then, the chipmaker orders that system and installs it. The order is complete and there are few big, follow-on orders. FEMs could be an exception to the rule, but that isn't a great business.

Why does this matter? First, the fab tool industry needs three or so strong vendors in each sector. Each vendor pushes the others to innovate. And they attempt to offer good products at decent prices.

The trouble? The fab automation sector is stagnant. Innovation is scarce. The sector has perhaps two vendors that are in decent financial shape. Maybe less.

In other words, there is a crisis in fab automation. If or when chipmakers begin to build fabs again, who will step up and devise the latest and greatest AMHS systems?

To me, that's unclear. The solution? Chipmakers may have to help fundor bail outtheir friendly fab automation vendors. If not, look out for the next Chapter 11. And dreams of next-generation, automated fabs could up in smoke.

Send me your thoughts about that as well. Happy to debate the topic.

- Mark LaPedus
EE Times

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