SAN JOSE, Calif. – After overcoming some major hurdles, Chinese fab tool vendor Advanced Micro-Fabrication Equipment Inc. (AMEC) is moving towards its next growth phase.
AMEC is now looking outside of Asia for growth in the etch and other fab tool sectors. The company is also expanding its manufacturing capacity, bolstering its presence in etch, and devising a new tool line. And over time, AMEC hopes to float an initial public offering (IPO).
Shanghai-based AMEC is changing the landscape in etch and other markets. It has shipped some 20 tools thus far. Customers reportedly include Globalfoundries Inc. and others, observers speculated.
Frank Masciocchi, a chip-equipment veteran and vice president of global business for AMEC, declined to identify its customers, but he indicated that the fab tool vendor is entering into its ''second phase’’ of growth. ''We are no longer seen as a startup,’’ Masciocchi told EE Times.
The company was founded in 2004, but itgrabbed the headlines by rolling out its first products-a reactive ion etcher and a high-pressure chemical vapor deposition (HPCVD) tool-in 2007. In doing so, the Chinese company hoped to compete against the big and established players, such as Applied, Lam, Novellus, Hitachi and TEL.
AMEC also has some strong backing. In 2006, the company completed its Series B financing, which raised $35 million. Participants in the round included existing investors: Walden International, Lightspeed Venture Partners, Redpoint Ventures, Interwest Partners, Bay Partners, Global Catalyst Partners and KT Venture Group. Leading financial institution Goldman Sachs joined the round as a new investor.
A year later, AMEC raised $8 million from Samsung Venture Investment Corp. (SVIC) and other investors. Qualcomm Inc. also invested in AMEC. More recently, it secured $58 million in Series C funding and $46 million in Series D funding.
But AMEC's efforts were somewhat sidetracked in October of 2007, when Applied Materials Inc. filed a suit against the company, The suit, filed in the U.S. District Court in the Northern District of California, claimed that AMEC was allegedly involved in misappropriation of trade secrets, breach of contract and unfair competition. One of the parties named in the suit was Gerald Yin, CEO of AMEC. Yin held various positions at Applied from 1991 to 2004, including general manager of the etch products group, according to the suit.
In 2009, AMEC obtained a ruling on a summary judgment motion it filed in its trade secret dispute with rival Applied. And last year, Applied and AMEC settled their claims.
Last month, AMEC claimed that it had prevailed for the second time in a patent infringement suit filed against AMEC subsidiaries by Lam Research Corp. in the Intellectual Property Court of Taiwan. In a decision, the court dismissed Lam's appeal of its earlier trial court defeat. In a separate matter, AMEC said it also ''scored a victory'' in Taiwan's Intellectual Property Office (TIPO) against Lam.
AMEC has basically cleared its name in the market. And despite the distractions, the company has made some inroads in the market, mainly in etch. Its 300-mm Primo D-RIE system leverages a twin-station, mini-batch cluster architecture with a single-wafer environment and a VHF de-coupled RIE plasma source. Applications for the tool include hard mask, spacer, dual damascene via and trench etches, among many others.
Geared for 65-nm devices and beyond, the system is said to improve productivity by more than 35 percent over comparative systems, while offering a 35 percent lower cost-of-ownership (CoO) benefit.
''AMEC has one of the premier etch developers running the company in Gerald Yin. It appears that Gerald has assembled a good business team and legal team as they have fended off both AMAT and Lam. They are well funded and seem to have a solid etch product and are slowing gaining traction,''said Dean Freeman, an analyst with Gartner Inc.
To date, most of AMEC’s tool shipments center around China, Singapore and Taiwan. The company has even garnered some repeat business in those regions. Now, the company is targeting its efforts in Europe and the United States, Masciocchi said.
This presents a major challenge for AMEC. Applied, Hitachi, Lam and TEL are formidable competitors. Other players, Mattson, Intevac, and SPTS, have made noise in the fragmented etch market.
Not all will survive in the market. There are too many players chasing after too few customers. AMEC believes it has the formula to survive because ''we have a good value proposition for our customers,’’ he said.
''With the competition in the etch space, it is likely AMEC will see some success. Will they displace the big boys in Lam, TEL and then AMAT? Unlikely, but you now have a Chinese supplier that will likely take market share in China when they are fully qualified,'' Gartner's Freeman said. ''Korea will look at them as leverage against the 'Big 3.' If they have a compelling etch product that can compete, they will likely see other business.''
For the most part, AMEC has played in the dielectric etch market in the IC sector, where its initial tools are being used for non-critical layers in chips. Among the new goals for the company are to extend its etch tools for the more critical layers in chip designs as well as to expand into the emerging through-silicon via (TSV) market, AMEC's Masciocchi said.
The company is also developing a new tool, dubbed the A-RIE. There are no details about the tool, but AMEC did say it is doubling its capacity to prepare for eventual growth. By October, AMEC will be able to manufacturer 170 machines a year.
It has 300 employees, compared to 150 in 2007. Clearly, the company faces many challenges, but the good news is that business is looking up. ''Capital spending is going up,’’ Masciocchi said.
In China, Chinese foundry Semiconductor Manufacturing International Corp. set its 2011 capital expenditures at around $1 billion. As reported, China's Grace Semiconductor Manufacturing Corp and Shanghai Hua Hong NEC Electronics Co. Ltd. (HHNEC) have begun construction of a 300-mm wafer fab at Zhangjiang Hi-Tech Park, Shanghai. That fab venture is called Hua Li.
Others are also on a spending spree. ''With Intel now on the offensive, and including recent capex updates from Samsung and Globalfoundries, our 2011 capex model moves to 12 percent year-over-year verses percent coming in,'' according to a recent report from Barclays Capital.
''There are still several major chipmakers that have yet to announce their capex plans for 2011, but with Samsung and TSMC in, it appears that total spending will increase 13.4 percent this year,'' according to a recent report from VLSI Research. ''Intel will be the biggest spender this year, beating Samsung by $100 million—though that could change depending on the exchange rate. The top five capex spenders will account for a whopping 65 percent of total spending, increasing their share by nearly five percentage points form a year ago.''
I suppose this market is a high tech industry that labor cost is not a major concern but having a pool of talents is the key to success. I wonder if there are enough talents in this field in China. How can they make the product cheaper beside lowering their profit margin expectation?
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