SAN FRANCISCO For years, the semiconductor-equipment market has seen its share of consolidation.
Expect this trend to continue in 2006 and beyond, according to one semiconductor-equipment veteran. "We are seeing an acceleration of consolidations and mergers in the market," observed Papken Der Torossian, chairman of Vistec Semiconductor Systems Corp., formerly known as Leica Microsystems. Vistec makes inspection, metrology and direct-write, electron-beam equipment.
As many as two chip-equipment vendors in five could fall victim to industry consolidation over the next decade, predicted Gartner Inc. in 2004.
Many see a renewed shakeout taking place in the automatic test equipment (ATE), e-beam, mask repair, nano-imprint lithography, wafer cleaning and other markets.
But the current shakeout appears to be centered around the inspection and metrology market, where a number of major mergers and acquisitions have taken place in recent times, Der Torossian said in an interview at last week's Semicon West trade show here.
Inspection and metrology is in the midst of what could be the "perfect storm." There are vast challenges in inspection and metrology, especially as chip makers move to the 65-nm node and beyond.
The segment also remains one of the few, high-growth markets in semiconductor equipment. The semiconductor inspection and metrology market is expected to grow 75 percent over the next three years. This is driven by the need for more refined inspection tools as the sector moves towards smaller dimensions on devices, according to The Information Network.
The market research group also suggests macro inspection and integrated tools will be the fastest growing segments of the market over the next three years.
In addition, there are a number of small and mid-sized companies in the market, many of which are financially strapped and on the block.
Several are struggling. Recently,
metrology-equipment maker Therma-Wave Inc. said that its independent registered public accounting firm issued another "going concern" warning about the company. Der Torossian happens to be the chairman of Therma-Wave, it was noted.
At the same time, though, a number of deals have made big headlines. For example, creating a potential metrology powerhouse, Rudolph Technologies Inc. last year completed its acquisition of August Technology Corp.
Earlier this year,
metrology-equipment specialist Nanometrics Inc. signed a definitive agreement to acquire Accent Optical Technologies Inc., a supplier of process control and metrology systems, for $80.9 million in stock.
Continuing on its buying spree, Nanometrics in March announced that it had acquired Soluris Inc., an overlay metrology company.
In a recent move to corner the silicon wafer inspection market, KLA-Tencor Corp. agreed to acquire ADE Corp. for approximately $488 million in stock.
The growth in the market has even attracted some newcomers, including Ultratech Inc. Taking a step in the metrology market, Ultratech recently said that it has entered into a non-binding letter of intent to purchase the assets of Oraxion Inc. for an undisclosed price.