Raymon Thompson, Semitool CEO
Alexander E. Braun -- Semiconductor International, 1/1/2001
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| Raymon Thompson (Source: Semitool) |
Thompson then joined Fluorocarbon — now Furon — designing Teflon products, including the first rinser dryer. He founded Corotek Corp. and served as chairman, selling it to Sola Basic Industries, which in turn sold it to General Signal. Thompson remained with Sola for two years afterwards, serving as vice president of the Tempress Microelectronics Division.
In 1978, Thompson incorporated his new company, Veratec, in California, and a year later designed, patented and introduced the first on-axis rinser dryer for the semiconductor industry. Veratec became Semitool and Thompson moved it to Kalispell, his boyhood hometown. Since then, Semitool has grown from 10 employees to more than 1600 worldwide, and from a 7500 ft2 building to its present 170,000 ft2 facility.
Thompson holds a B.S. in mechanical engineering from West Coast University (Orange, Calif.).
SI: This has been a banner year for Semitool — you've had record sales and income for 3Q00, introduced a new cluster tool for ECD and licensed your copper technology. Anything else coming along?
Thompson: We've done a considerable amount of new product development that I believe offers significant changes for the chip fabrication business. We're focusing much of our attention to continuous improvement and the broadening of opportunities for process-of-record adoption of products and developments that we have worked on during the down times. Although the first year we ever experienced a loss was 1999 (and I didn't like it!), we maximized our R&D efforts because we understood we'd derive considerable results from such an investment. Now all that effort and investment is coming to fruition.
SI: How would you describe your part in all this?
Thompson: I am a mechanical engineer and product idea person. I tend to be more on the creative side than the day-to-day management of things. I depend on a management team around and under me, which is largely self-directed and therefore a tremendous asset. Another advantage is our location — there's an independent, can-do spirit in Montana, which is an excellent fit for what we aim to accomplish. We have men and women here who expect to be — and are — depended upon and trusted. This attitude is very important to me because it enables me to exercise my "management-by-wandering-around" philosophy — the Bill Hewlett model. We don't have strong structural lines and our people — whether management or on the line — fill in the gaps as they arise. We are in a fast-changing business.
SI: This requires flexibility.
Thompson: It does indeed! Because of the quick-changing nature of our industry, whenever these gaps pop up we need people already there who will see them as they happen and begin working on the opportunities they represent. We must be very adaptable, flexible and trusting of each other. Our business is like a basketball team, as opposed to say, baseball, which involves a player at a time. Our company tends to be very interactive, very fast. Occasionally, of course, we miss the basket but, overall, I have people I can trust and rely upon, and set them loose to do their thing.
SI: You mentioned that Montana's relative isolation has helped Semitool. How would you compare your environment with that of Silicon Valley and some of the other industry technology centers?
Thompson: People who live here generally have their family and lifestyle issues well settled. They're thrilled to be here and in fact say it's the only place in the world that they want to live in. When they come to work, this is not a distraction to them — quite the opposite. They see their work and its value as the factor that helps them maintain that desired lifestyle — they have a bigger stimulus to want the company to continue being successful. Most of our people wouldn't dream of moving to a place such as the San Francisco Bay Area, and cope with traffic, crowds and the various other less desirable things that go with big city life. They also see it as an important opportunity for their children.
SI: Is there something else you do to reinforce this?
Thompson: We try to adjust ourselves as much as we can to the lifestyle (smiling). For example, on the first day of hunting season, the place doesn't exactly empty itself out, but on that day some of the fellows are out there hunting — which is another reason why they are here. So there is a mindset that exists with respect to their lives and desires — even our winters have an appeal!
SI: Semitool seems well settled at present. Is there anything that you might be considering to change in the company?
Thompson: We're gearing for upcoming growth. This means we are — and will be — making a number of changes to accommodate that growth. We're building on the people we have here, to ensure that contributors aren't overlooked.
SI: What, then, are your short- and long-term plans and strategies to prepare for this growth?
Thompson: We are in the process of beefing up our senior management team. Although we have very strong people, there are just too few of them — some holes need to be filled. We've not paid as much attention as we should have to Asia and Japan — we need to increase our presence there, while at the same time increase our overall marketing operation.
SI: What do you see as your next growth areas?
Thompson: Electroplating, naturally. This is a major, almost disruptive, technological change for the semiconductor industry.
SI: What do you mean by "disruptive"?
Thompson: Technologies that displace other technologies and change companies can be viewed as disruptive — which is not to say that, in this case, "disruption" is a bad thing. The mini-mills vs. the integrated mills in steel production are an example of this. I believe electroplating will bring with it a revival of wet chemical processing steps, which of course is our core expertise. Fifteen years ago, everybody was predicting that wet chemical processes would die out, but now electroplating has given rise to a whole array of wafer cleaning opportunities. I also see single-wafer processing as being a much more important part of our future than it has been historically — we've been a batch spray chemical process equipment supplier. Now we have new single-wafer products and our new plating tool is a significant part of our future.
SI: So you are looking at major changes.
Thompson: Yes, but this should not be taken to mean we're turning our back on our core business, which has strengthened considerably during this recent market upturn. We're working hard to put together a larger sales and marketing organization to strengthen our ability to get business for our present and new products. Over the last years, we have let some of that emphasis go, in terms of our more automated, top ASP products — what we refer to as our stand-alone, manual-loaded tools. We're putting together a management team to ensure that we don't lose any opportunities.
SI: Is growth more difficult to do than before?
Thompson: In some ways it is. In terms of growing a company and getting good people, it is more difficult. However, in terms of opportunity, it isn't.
SI: What are you planning to do differently from your competitors?
Thompson: For the most part, our platforms are distinctly different from those of anyone else. We intend to ensure that this continues. In the wet chemical processing area there is a whole sector of immersion, wet bath, dippy-dunk kind of chemical processing equipment that we've never gone into — it's a huge market, but one that doesn't deliver the margin opportunities that our distinctive products do. We believe that being able to line up a product to a process opportunity which does a superior job in that particular process (and chemical spray processing often does that) gives us the opportunity for gross margins that we would otherwise not see. We'll always want to be innovative and bring products to the marketplace that bring payback to the customers — and good margins to ourselves. This has always been a focus of ours.
SI: Following along that line, what should your customers expect from you over the next two years?
Thompson: Better ECD processes than have been seen to date, better opportunities to clean and process both the front and back sides of a wafer in a way no one has seen yet and draw the line at the beveled edge — which for copper contamination control is crucial. The whole capsule processing is new and we still have a long way to go in terms of process steps we can address.
SI: Customers in the industry are no longer asking vendors to just supply a good product for a reasonable price. They also want from them the costly expertise they lack in-house. How do you view this in terms of the fact that you must also maintain your own R&D effort for product development? Has the time come to ask customers to help defray these costs?
Thompson: I don't think so — not yet anyway — not beyond the current profit margin we make on each product. In my view, a bigger concern is to create a product that is sufficiently robust and simple and reliable in its operation. Build the product so that the user doesn't require additional expertise from the vendor. The customer already pays for our expertise in terms of the profit margin we make on each of our products.
SI: Do you think you have sufficiently open dialog with your customers regarding their needs?
Thompson: (Smiling) Does anyone? Customers always have a hidden agenda or IP of some kind that they do not wish to share with the outside world, which includes their vendors. I consider this a management issue that has seeped very deeply into the semiconductor capital equipment supplier and customer relationship, and I find it disturbing.
SI: Can this situation be changed?
Thompson: Moderated, perhaps. It's our job to interpret what the customer needs. That being said, obviously the smaller the input, the more difficult it becomes for us to interpret those needs. Here's where new product development cycle time becomes important because your risks are increased by this lack of open communication. All you can do is look at what you understand to be the facts of the situation relative to what you have to offer for it, then do what you must and do it quickly. If it works, great! If it doesn't, you've learned something.
SI: Semitool is going into copper in a major way. What do you view as the unresolved hurdle in the transition into copper?
Thompson: The multibillion-dollar installed base of vacuum deposition tools. They do aluminum; they don't do copper successfully. While they are costlier to operate, there isn't even an option to operate them until they get their plating capabilities installed. Along with that, of course, is the chip redesign to accommodate the needs of electroplating vs. sputtering. That's a hindrance; however, at least one microprocessor manufacturer — AMD — has undergone it, and is profiting handsomely from it.
SI: How do you view the move to fabless?
Thompson: The way it's taking place at present certainly is putting a lot of power in the hands of the fabs. I think that's a phase, however. Ultimately, it will generate entrepreneurial opportunities that will originate in these super-foundries' limitations. I'm not sure what shape this will take, but out of the needs — and failings — of giant operations arise opportunities for smaller operators. Let’s be clear about one thing — I believe that the fabs are doing well because they have good fundamental management practices vs. those of some of our integrated manufacturers, which haven't been too good. The success of good management practices encourages the success of those practices elsewhere.
SI: What is your opinion about the current consolidation feeding frenzy?
Thompson: I view it with indifference. While it doesn't stifle innovation, it complicates it, as customers go to larger suppliers and attempt to limit their total number of suppliers. It makes it more difficult for a start-up idea to get established on its own.
SI: What trends should we be paying more attention to?
Thompson: Certainly the move toward electroplating, which translates into room-temperature, room-pressure processes, as opposed to ultrahigh vacuum processes. This will be driven largely by cost benefits. It hasn't been fully appreciated yet.
SI: Do you believe we can minimize cycles in our industry?
Thompson: I don't side with those who clamor for better, more accurate forecasting. I don't buy that as a solution, and don't believe there is much to be done. (Smiling) These cycles are characteristic of an industry full of insurmountable opportunity.
SI: What would you like to change in the industry?
Thompson: I would like to see companies like IBM — and it's moving this way — get back to the integrity they had in the 1970s in dealing with its buyers and customers. They had integrity and demanded it from their suppliers. This used to be more important than price.
SI: What will Semitool look like in five years?
Thompson: When we succeed in pulling together a larger, stronger management team, we'll be a far larger player than we are today. Then we will have so much going on in internal growth and technology that we will not even look for possible acquisitions.
— Alexander E. Braun
