Boris Lipkin, Therma-Wave Inc., CEO

Boris Lipkin (Source: Therma-Wave)

Boris Lipkin is CEO for Therma-Wave Inc. (Fremont, Calif.). Before that, he was senior vice president of ASML Holding NV. Prior to ASML's acquisition of Silicon Valley Group (SVG), Lipkin served in various capacities at SVG, including president of the Track Division and corporate vice president of human resources, procurement and supply chain management. Before joining SVG in 1995, Lipkin was vice president and general manager of the Thin Films Division of Varian Associates and senior engineering manager for the Equipment Technology Group of the Micro Electronic Division of IBM from 1978 to 1992. He has an M.S. in electro-mechanical engineering from the Polytechnic Institute in Kharkov, Ukraine, and he completed the executive MBA program at Stanford University. Therma-Wave develops, manufactures, markets and services process control metrology systems used in the fabrication of semiconductors.

SI: Therma-Wave has experienced a 180° turnaround in its earnings situation. What can you tell us about this?

Lipkin: We are very pleased with our accomplishments thus far. In my first six quarters as CEO, we increased our revenue from $11.9M to $22.6M. This resulted from several factors. Overall, we paid close attention to how we executed key business decisions; we're still focused on these. With this mindset, we improved the company's financial performance by first stabilizing operating expenses and then reducing them by almost 40%. This allowed us to build up confidence with our customers. You can imagine that when people buy anything connected with advanced technology, they're extremely interested in knowing how reliable their supplier is going to be over the long term. Regardless of cost, no one will invest in advanced technology unless he has trust in the supplier. Another key element we focused on was offering technology solutions, not just "products," and provided more than just "adequate" customer support. These are also keys to showing the world that you have a stable company. The net result is that, as we improved our revenues, we increased bookings for our metrology solutions. Our customers' response and their continued support is a testimony to these efforts.

SI: The efforts certainly seemed to pay off.

Lipkin: Absolutely! If you look at our last quarter, 86% of our bookings were for our advanced products. In the past 18 months, we managed to increase our gross margin from -15% to 48%. We're not yet where I'd like us to be, but there's marked improvement.

SI: The industry's situation must not have helped much.

Lipkin: True. But we're fortunate to be in the process diagnostic market space, particularly in metrology for the leading edge. As long as IC manufacturers continue to adopt smaller technology nodes, they must invest in the needed metrology. Our vision is for Therma-Wave to become the supplier of choice, the preferred supplier, for our customers.

SI: Is the recovery beginning to fade or are the orders still coming in?

Lipkin: I don't yet see any slowdown in our business. Last quarter, we reported our highest book-to-bill ratio — 1.25. I expect to see an increase in bookings in every quarter. How long will this last? It's hard to say — anyone's horizon in our industry extends out four or five months. Right now, we have the best backlog the company has experienced in the last four years.

SI: Now that the company has turned around, is there anything that you will be doing differently?

Lipkin: I am trying to decouple company issues that can be controlled from those that cannot. For example, I cannot control the market or the way our customers will make their investments. What I can control is our product offerings, our flexibility and sensitivity to customer needs. If you link this to the demand for advanced metrology, you can visualize the direction we will be taking. Foremost in this strategy, with the company's financial situation stabilized, is now shifting our focus from tactical (how I spent my first 18 months) to strategic efforts. This means concentrating on meeting customer needs.

SI: Then you're looking to expand your presence in the metrology arena?

Lipkin: Correct. We play only in the metrology space, so we look for the key drivers that define the needs for metrology equipment. Then, we can do strategic planning to position ourselves to not only be a supplier of current needs, but to work with customers to predict their needs over the next three years. This enables us to synchronize our product roadmap to their requirements, while allowing us to be prepared if market drivers change.

SI: Which do you see as the key drivers?

Lipkin: First, technology scaling. Then, with the smaller geometries, new materials, including high-k dielectrics, additional metal layers, continued 300 mm conversion, and the deployment of advanced process control (APC). Within all these, increasingly our customers are looking to buy broadly applicable metrology solutions that will be extendable through at least the next three technology nodes. People are still buying equipment for 90 nm, but our job is to make sure our metrology technology and applications not only deal with 90 nm, but also with 65 and 45 nm, and we're already considering what we are going to do for 32 nm.

SI: Metrology is always at technology's edge. Do you find that the costs of R&D have reached a point at which maybe you should expect some of your customers to help with the effort?

Lipkin: Definitely. (Laughing) But of course I would have to first convince them of this idea. Like with everything else, people always look for the most inexpensive solution. However, when it comes to metrology, they do not mind paying for differentiation. It isn't enough for us to share our vision and technology with the customer; the customer must also share his needs with us, so that when we invest our resources, we do so in the right direction.

SI: Do you find the idea of partnering helpful?

Lipkin: Of course. However, this is not something that we have explored to its limits as yet.

SI: What are your next growth areas and how are you planning for them?

Lipkin: There are three areas where we see growth. There are increasingly more advanced applications for our current technology, which we can use for specific customers. Then, there is the use and adaptation of integrated metrology. Finally, optical CD technology is emerging as a multi-faceted solution that solves a lot of leading-edge metrology problems. In the advanced applications area, for example, hafnium oxide for high-k and gates offers new opportunities for us. We're getting very valuable feedback from customers on this. In the integrated metrology arena, we don't provide solutions to end users; we provide them to OEMs who integrate them into their tools. This area is advancing slowly, but I am convinced that integrated metrology will become an enabler that will strongly complement standalone metrology. The smaller the geometry, the greater the need for integrated metrology, and optical CD offers considerable opportunities. The CD-SEM has been in use for decades, and its limitations are driving the rapid adoption of optical CD because it is a fabwide enabler of APC. Also, you can do CD, profile and film thickness simultaneously using the same equipment. And it works in real time, gives you precision, and is non-destructive, while being used either as a standalone or integrated system, providing 3× throughput efficiency. So far, optical CD is a small market, but it's also the fastest growing segment in metrology, and more and more engineers are recognizing the technology's benefits.