Gazing into the Magic 8-Ball

Alas, Electronic News, we hardly knew ye: RIP.Regardless of what forecast you want to put faith in, the sure money says that 2005 is going to be a relatively tough year for the semiconductor supply chain, at least in the first half.

“That (reported softening) is real, and we would certainly agree,” said Bob MacKnight, COO of thermal processing tool vendor Mattson Technology Inc. “There’s no question that the softness that other people have reported, we are seeing.” Other executives that Electronic News spoke with from throughout the supply chain repeated his sentiments.

The pain that began at the end of Q3 of this year, that of an industry overburdened with inventory, is likely to linger for at least a quarter or two, even as that inventory appears to have been largely burned off, at least in some markets. But then compared to what equipment and materials suppliers had to suffer through the last time the industry went through a cycle, this downturn might not seem too painful; at the least, endurable.

As Teradyne Inc.’s manager of business development Mark Kohalmy put it: “We’re not falling off a cliff, but I can’t say it feels great, either.” That seems to be the consensus among capital equipment and materials suppliers as the industry heads into 2004.

Things are continuing to soften, but the chip industry seems to have learned its lesson, at least for now. Rather than the mass order cancellations that marked Q4 2000 and the early quarters of 2001, chipmakers are frequently delaying orders by a quarter or two, or placing smaller orders for capacity that they need immediately, executives report.

And apparently it’s because chipmakers were smarter, or at least more cautious, about the capacity that they added in 2004, tying it closely with end demand.

“We’re getting business requirements dropped in our laps for short term delivery for production volumes,” Kohalmy said; five or six testers ordered for delivery in six weeks, is a typical example. This experience isn’t limited to any specific market, either, as one market may be hot one week, only too cool off a few weeks later, he said.

“My read on this is that we are in an environment that has no forecast for our customers,” Kohalmy said. “It’s a new phenomenon from our standpoint.”

The same phenomenon is being seen in the front end of the equipment realm as well, reported Jeff Benzing, VP and chief business officer at equipment vendor Novellus Systems Inc.

“We’ve seen a very marked difference in the behavior of our customers,” Benzing said. Like Teradyne, Novellus is seeing front-end capacity currently being added in what he described as small, finite increments, sliced up into phases; wafer starts are ramping as needed. “They’re taking smaller chunks of capacity and more closely coupling that with wafer starts and their customers’ end unit demand,” he said of Novellus’ customers.

While order lumpiness may make business tough to manage, it’s perhaps better than managing no orders at all.

But a quick and lumpy order environment has made it difficult to put a specific forecasting finger on 2005. “Part of the issue is that visibility has gotten very poor over the last quarter,” noted Mary Puma, president and CEO of Axcelis Technology Inc. “It’s difficult to know what the first half of the year and 2005 in general is going to look like,” she added.

Time to Look to Technology

So where are those lumpy, holiday-mashed-potatoes orders coming from? Regionally speaking, while the Asian foundries have cut way back after an orgy of capacity building and capital spending in 2004, Japan remains a hot spot. Having so long under invested, Japanese chipmakers seem to be making up for lost time, equipment and materials executives say.

In terms of markets, they report that DRAM spending seems to remain strong, perhaps in spite of recent price pressure. And logic generally seems to be holding its own, as are most large IDMs – it is the foundry market that is the weakest right now in terms of capital expenditures.

The final numbers have yet to be tabulated, but it looks as if chip foundries added capacity to the tune of 100 percent or more in 2004, so there’s no surprise that they are throttling back quickly. But equipment executives whose companies serve the foundry market say it looks like the inventory burn at the foundries is nearing its end.

But in the meantime, equipment suppliers can look forward to more technology buys than capacity-driven ones, at least in the first half of 2005. While chipmakers at the leading edge are already cranking out chips with 90nm design rules, the bulk of chipmakers are just now making decisions about the composition of their 90nm fab lines, and R&D for the 65nm node is in full swing.

“We’re expecting any growth (in 2005) to be driven solely by the leading edge,” observed Jim Northup, COO of photomask supplier DuPont Photomasks Inc. “In 2005, for all the talk of 65nm, it’s 90nm for us,” he said. “The ramp is beginning to hit full stride, and we expect that to drive any growth in the industry.”

As the industry pauses to digest its chip inventory and its capacity additions of 2004, it will be looking to improve its yields, too. Metrology equipment orders come early in the technology cycle, noted Rick Wallace, a VP at KLA-Tencor Corp. As the 90nm era gets under way, the narrowing process windows in the fab have people nervous.

“There is a lot of concern with yield performance on the new technologies,” Wallace said. He had just concluded customer visits around the globe just prior to the December holidays and talking with Electronic News.

“By and large, people are anxious … from a yield perspective. Part of that … is on 130nm people had initial success, and then when they ramped, there were a lot of problems. They found it was much more difficult,” Wallace said.

It may prove a good thing for materials suppliers, in the long run, however. Out of all members of the supply chain, it’s the materials vendors that fluctuate the most, being closely tied to activity in the fabs. The deep submicron era is calling more and more exotic materials and complex integration schemes into play in order to keep devices scaling.

“There’s an exclamation point on that statement,” agreed Dan Koharko, VP of marketing at Rohm and Haas Electronic Materials CMP Technologies.

It’s actually a dual-edged sword for suppliers like Rohm and Haas, though – ultimately it may translate to increased growth and demand, but in the meantime it means a lot of engineering headaches. “The material aspect of the problem is becoming more of a material play – since they are changing so many of these materials at once, it is difficult to get a stable regime,” Koharko said.

And the short cycle times now common in a consumer-driven industry don’t help. Rohm and Haas has seen customers settle on non optimized processes just to get chips out the door, as long as yields were more or less reasonable.

“And everybody is choosing different – it’s become a very company specific problem and solution that we have to bring,” Koharko said. “What we solve for one customer … will rarely work for another customer.

Once Bitten, Twice Shy

But perhaps a more important question than what 2005 holds in store for the industry might be: Has the industry learned its lesson?

In 2001 and 2002, there was a lot of talk within the industry about acknowledging that the industry was maturing in terms of growth rates, and that cycles were an inevitable part of life. Many companies set a goal of remaining profitable throughout the semiconductor cycle.

Now that they’ve talked the talk, 2005 may be the year these companies have to walk the walk.

Just the fact that there has been an inventory correction indicates that visibility and forecasting is an inexact science at best. But the fact that orders became lumpy so quickly, and that many orders are being delayed but not canceled, would seem to indicate that chipmakers are reacting more quickly to current market conditions, rather than pinning their hopes on future forecasts, say those in the equipment business.

Executives also cite the fact that their customers have been so cautious in adding capacity, relying on just-in-time ordering in many cases. As Teradyne’s Kohalmy and Novellus’ Benzing observed, the current cycle is, well, uncharacteristic – it’s not quite like any previous down cycle they’ve experienced before. Certainly the “build it out and the business will come” mentality of the late 1990s and 2000 didn’t return in 2003 and 2004.

And equipment vendors themselves seem to have been more prudent in this cycle. While there have been a number of layoffs this past autumn, it is nothing like the massive layoffs of 2001.

“I think we are like many companies in trying to keep the business lean, and find new models as to how we deal with up and down cycles,” said Mattson’s MacKnight. “I think the industry is better in general [and] ready to enter a period of softness.”

A number of equipment makers, like Axcelis, relied on a lot of temporary and contract labor to ramp production over the past 18 months. “Once we saw things were slowing down, we took action pretty quickly,” Axcelis’ Puma noted. “We said ‘We need to do this, even if it is short and shallow.'”

Of course, only time will tell if this seemingly supply-side driven down cycle will be a relatively mild one, and that growth will return in the latter half of 2005. It’s too early to say with any certainty if the industry has learned its lessons and will be marked by less volatility.

But as several executives observed, it’s the volatility and uncertainty within and without the industry that keep things interesting, and it will be entertaining for those on the sidelines to observe who is prepared to deal with adversity in the quarters to come.

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.

Mattson Sheds Wet Clean Business

Alas, Electronic News, we hardly knew ye: RIP.There can be no better indication of how the industry has changed over the course of the past three years than Mattson Technologies Inc.’s divestiture of its wet surface preparation division.

The Fremont, Calif.-based equipment supplier today announced it would be selling its wafer wet cleaning division to rival SCP Global Technologies Inc., the No. 2 wet bench supplier behind Japanese player DaiNippon Screen Co.

The move by Mattson had been in the rumor mill for some time prior to today’s announcement.

The companies did not release terms of the definitive agreement they signed, but they did say they are pursuing a strategic alliance to develop integrated wet and dry cleaning processes. Under the alliance, Mattson and SCP would cross license intellectual property, which they believe would significantly increase development efficiencies.

SCP did say it would receive $50 million in venture capital and have access to a $20 million line of credit, both happening concurrently with the close of the Mattson deal, leaving the company well capitalized. Mattson will absorb yet another restructuring charge upon close of the acquisition.

The announcement came in conjunction with Mattson’s Q4 2002 and year-end results, in which the company posted net loss of $31.9 million, or 71 cents per share on the quarter, and a loss of $94.3 million or $2.23 per share for the full-year. While Mattson’s losses grew quarter over quarter, they improved 72 percent year over year, even while bookings remained flat from 2001 to 2002 at $186 million.

That improvement came because of significant restructuring and focusing on core competencies, said Dave Dutton, president and CEO. The company’s ongoing efforts in these areas include the shedding of its wet wafer clean division, leaving it with rapid thermal processing (RTP) and photoresist cleaning, or dry strip.

“Our industry has changed permanently. … This is more than just a cyclical downturn,” Dutton said during a conference call today with analysts. Companies must change with the times, in order to survive, he added.

As a result, the company is embarking on a plan it calls cyclically flexible enterprise, in which Mattson aims to remain profitable in terms of an operating income during all points of an industry cycle going forward. To do this it must concentrate on its core competencies — areas of the market where it has technology and market leadership, Dutton said. It also means utilizing lean manufacturing principles where feasible, such as outsourcing the assembly of mature 200mm equipment, and developing other strategic partnerships such as the one it is pursuing with SCP Global.

“We view this strategy as most critical to us,” Dutton said, adding that he expects other companies that haven’t done so already to begin taking similar avenues of business.

At first glance, the wet products division doesn’t seem to be that harmful to Mattson. Revenue for the wet division was $90.9 million, about 45 percent of 2002 revenue, according to CFO Ludger H. Viefhues. But that percentage was higher than average because of deferred revenues under accounting rules related to the U.S. Securities and Exchange Commission’s Staff Accounting Bill 101, Viefhues said during the conference call.

At the end of 2002, the wet clean division accounted for 357 employees out of 1152 total. On a shipment basis, revenue per employee in the division was half that of employees in the RTP and strip divisions. “These products heavily impacted our resources,” Viefhues remarked. “The divestiture changes this.”

Mattson — and an industry — changes its tune

Layoffs, consolidation and divestiture of unprofitable divisions have become so commonplace in the industry, particularly among its equipment suppliers, that it’s almost not even newsworthy anymore. But Mattson’s actions today are symptomatic of something deeper than merely improving the bottom line in an effort to get back to profitability.

Back in 2000, many companies were concentrating on achieving critical mass. In fact, the term critical mass was one of the more popular terms in the marketing lexicon of the time, as the industry enjoyed phenomenal growth and a lot of pie-in-the-sky forecasts of continued growth and an end to industry cycles.

A few years later, as the downturn that began at the end of 2000 extends into its third year, the industry has become much more concerned with being lean and concentrating on core competencies, rather than growth through acquisition. Many companies are discontinuing unprofitable business units or selling them to rivals, such as Mattson is doing with SCP, and at the same time seeking partners to distribute the cost of development and R&D.

Mattson added RTP and wet bench tools to its strip repertoire back in 2000 with its acquisition of the semi equipment division of German supplier Steag Electronic Systems AG and its U.S. wet process rival CFM Technologies Inc.

“The industry is consolidating, and you are either getting big or getting acquired,” founder and then CEO Brad Mattson told Electronic News back in 2000. “This was my strategic priority: to grow and keep growing,” he said.

Analysts and competitors alike at the time said it was a shrewd move by Mattson. By offering both wet and dry cleaning tools, the company was in a position to stake out leadership in surface preparation, particularly in the emerging copper dual damascene market.

At the time the combined projected revenues of the three companies were between $460 million and $500 million, making Mattson the 15th largest equipment vendor in the world. The company was well on its way to becoming a huge deposition company, having moved into chemical vapor deposition (CVD), and epitaxial deposition, as well as wet and dry clean and RTP.

Needless to say, times have changed; Mattson’s revenue last year was $203.5 million, a 12 percent drop from 2001.

The timing of the three-way merger coincided with the worse downturn in the industry’s history, making it problematic at best. Like most if not all of its fellow tool vendors and competitors, it has been forced to dramatically cut costs, trimming the fat and sometimes even muscle from its operations, undoing in part what the merger put in place, while it concentrates on what it does best: RTP and strip.

“Unfortunately, Mattson could never get their arms around Steag and the wet group,” said Dean Freeman, a senior analyst with market research firm GartnerGroup’s Dataquest unit. Had the three-way merger been accomplished early in 2000, the company might have been more successful in achieving leverage and momentum in all of its new markets, he suggested.

While critical mass may still be in important in terms of servicing a global market that turns more and more to outsourcing, lean operations have become a way of life.

Divestiture of the wet clean group was the last step for Mattson, said Dutton. The company has already announced that it’s narrowing the focus of its epitaxy and CVD units to existing strategic customers.

“We believe the industry has changed,” Dutton reiterated. “We’re coming out of 2002 much tougher and much better prepared to operate in all cycles.”

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.

Downturn Dilemma: Machine Shops May Hurt Upturn

Alas, Electronic News (the print edition): we hardly knew ye!Machine shops may prove an Achilles heel during the next upturn in terms of capacity, as there may not be enough of them left to crank out parts for semi manufacturing tools.

The industry may be in for a repeat or worse of what happened in the early 1990s, when a number of machine shops closed during tough economic times at the beginning of the decade. Enough capacity was lost that it caused problems as equipment suppliers tried to ramp up tool production.

Given today’s growing reliance on outsourcing, particularly for parts, coupled with the fact that many machine shops around Silicon Valley and throughout the country have closed, it could be a problem again.

“A lot of shops have gone under. … It might happen again,” acknowledged Paul Givens, president of Givmar Precision Machining, recalling the problem in the early 1990s. Givmar has done work for the likes of Novellus, KLA-Tencor and Teradyne, among others.

Because it has a broad customer base that’s not dependent on the chip industry, Givmar is weathering the tough times. But many shops that concentrated on semiconductor-related work have closed their doors, Givens said. “I don’t know what’s going to happen in the next upturn,” he added. In addition to the lost capacity, qualified machinists have left Silicon Valley, looking for jobs elsewhere. To make matters worse, the National Tool and Machining Association (NTMA) recently had to close its training facility in San Francisco.

But the problem is not just a localized phenomenon. Some 500 machine shops have closed in the past year across the United States, according to Matthew Coffey, president of the NTMA. “We’ve lost companies that I thought were very solid companies,” Coffey said.

Compounding the potential ramp problem, some surviving machine shops that have served high-tech equipment suppliers for decades are now turning their backs on the industry, looking instead to aerospace, medical and military business. Having been caught off guard by the extent and depth of the current semiconductor industry downturn – after adding capacity to meet the booming demand in 2000 – the machine shop industry is feeling forsaken as the industry turns to offshore manufacturing, namely in China.

“Even in a ramp, a lot of these suppliers aren’t going to go back and embrace the electronics industry,” noted Richard Wills, owner of D&H Manufacturing Co., a Fremont, Calif., shop that has been around for 45 years. In the past D&H has done work for many of the large OEMs in Silicon Valley, among them Applied Materials, Lam and Novellus. These companies have tried to drive prices so low during the downturn that shops like D&H have turned down their business because it wasn’t worth it, Wills said.

Chinese flagBut these other industries can’t supply the volume of business that companies such as Applied Materials Inc. brought to a business like D&H. “We’ve known they have gone to China. They’ve told us. They’ve found some large [Chinese] suppliers,” Wills said.
Not Everyone Enamored with China

For the machine shop industry, and by association American manufacturing in general, it is China that is the underlying issue in its economic problems. China, which by and large has been embraced with open arms by the semiconductor industry, is drawing jobs and business away under circumstances with which domestic machine shops can’t hope to compete, the industry says.

China has only served to add insult to economic injury, as far as the machine shops are concerned. “Will there be an upturn or will it all be offshore when it turns so it will be irrelevant to domestic manufacturers? ? No one is thinking about that,” said the NTMA’s Coffey.

Both Coffey and Wills pointed out that today much of the machine work is being done on option, being auctioned off via the Internet, and much of it is going to Chinese companies. “The Chinese are always going to bid below us,” Coffey said. “Economic recovery by itself is not going to heal this problem. There is a major systemic shift that is destroying the supply chain infrastructure nationwide.”

Despite the political wrangling over Chinese trade that has taken place in Washington, D.C., over the past several years prior to China’s entry into the World Trade Organization (WTO)—wrangling that has heavily involved the semiconductor industries lobbyists—there are still high tariffs and duties on goods imported into China, according to Coffey and Wills.

“The playing field is not level at all,” Wills noted. In addition to the tariff and duty imbalance, the Chinese and other Asian governments provide a lot of economic support, and environmental regulations are exceptionally lax compared to those in the United States, particularly California, he said.

“I believe the politicians don’t understand that we are losing manufacturing at a tremendous pace. Will we be able to remain a manufacturing power? I doubt it. ? If they are going to use the term, ‘free trade,’ it has to be equal, both ways,” Wills said.

But the NTMA is not taking the issue lying down; it is trying to form a political action committee to bring Washington’s attention to its plight.

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.

Outsourcing Has Its Dark Side

Nanometrics Opts for Vertical Integration Instead

Alas, Electronic News (the print edition): we hardly knew ye!

The metrology company is bucking the trend and has become more vertically integrated to guarantee its ability to ramp whenever the industry recovers. A key part of its strategy is being able to deliver its metrology tools quickly and at the same time being able to directly ensure quality.

When the next upturn does come, having its own in-house machine shop will be a competitive advantage for Nanometrics over its larger competitors, according to its CEO John Heaton.

John Heaton, Nanometrics CEO“My only advantage as a small company is to do something quickly, better, faster, cheaper,” Heaton explained. In the past, Nanometrics would have to compete during an upturn for time at local machine shops that also served much larger companies, such as KLA-Tencor Inc., a competitor, and Applied Materials, a customer.

Needless to say, the larger companies often took priority. Furthermore, there was such a rush during 2000 among the entire supply chain that the company had quality-control problems with its suppliers. Thus Nanometrics has brought its own machine shop, anodizing shop and related parts of the business in-house.

But there is more to the strategy than guaranteeing quality and the ability to ramp production. Many of the machine shops used by process technology OEMs were hit hard by the two-year economic downturn. A number of them have closed their doors, which could dramatically impact the ability to ramp for the companies that have relied on them in the past, Heaton said.

“No one is talking about that right now. We believe we will have a competitive advantage,” he added.

Nanometrics’ size and its business model lend themselves to vertical integration. The company has been an early proponent of integrated metrology in an industry that is just beginning to seriously come around to the idea. The company has based its technology on integrated metrology modules, and then migrated that technology to its stand-alone platforms, rather than the other way around.

“We start with a clean sheet of paper and say how do we take our technology and redesign it?” said Peter Gise, Nanometrics’ senior marketing manager.

That has meant the key components of its systems are small, compact systems, which are not particularly challenging for an in-house machine shop to produce quickly while maintaining quality. And by bringing the manufacturing in-house, it keeps the cost of the finished integrated metrology modules down by eliminating a step in the supply chain, he said.

“We believe integrated metrology is the way to go,” Gise said. But this is not to suggest that the company has forsaken its off-line tool base. “We haven’t exactly bet the farm because we still have off-line tools,” he added. But the concept is gaining traction in both OEM and end-user customers. “In three to five years ? it’s really going to take hold,” he said.

With chip production lot sizes decreasing along with feature sizes and cycle times, process parameters are becoming increasingly tighter, and defects more critical. Using feed-forward and feedback of metrology data to control process excursions during production runs is becoming an increasingly popular idea among chipmakers, Gise said. As a result, Nanometrics has begun expanding beyond its traditional thin-film measurement to metrology applications for lithography, planarization, deposition, etch, and copper and low-k films.

This past week the company rolled out the Nano CLP-9010, a laser profiler that nondestructively monitors the metal loss between an isolated copper feature and the surrounding dielectric region. The module is designed to integrate within a metal chemical mechanical planarization tool. It is a new technology for Nanometrics, and an application driven by and large by its OEM customers, Heaton said. Interest in the new module was nearly instantaneous, he said, adding that the company started receiving calls from customers within hours of the news release.

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.

Qualifying Technology

Editor’s Note: I included this story, along with the other two bearing this date, October 14 (Open Architecture vs. Open Standard; Can Chips Make You a Better Person?) not because I thought they were particularly brilliant journalism, but because they bore datelines from three different countries — one from an entirely separate continent — all in the same issue. Pretty cool, no? I doubt I’ll ever win a Pulitzer, but at least I can lay claim to this.

French Component Supplier Relies on Technology to Set It Apart

MONTPELIER, France — Equipment component supplier Qualiflow SA is taking a decidedly different tack than its larger and longer established competitors.

Alas, Electronic News (the print edition): we hardly knew ye!Outsourcing is ruling business models, and component suppliers today are positioning themselves as critical subsystems suppliers, building complete modules for their OEM and chipmaker customers and taking advantage of prevailing trends. But Qualiflow, a smaller newcomer, is instead staking its claim based on its technology. It is depending on technological innovation to gain market share, while at the same time outsourcing manufacturing while keeping final assembly in house.

This is something the company couldn’t continue to do if it were to go into the subsystem module business, explained Chairman and CEO Claude Jacquemin. “We could make more profit, maybe, but it would also require more [capital] investment,” he said. “We feel we can bring value to our shareholders through advanced technology.”

The mass flow controller (MFC) market, for example, is a niche market that hasn’t changed much; the same big players that were there 10 years ago are there today, Jacquemin noted. The challenge is finding ways to improve a relatively simple idea and product with new technology.

Qualiflow had hockey-stick growth through 2001.Of course the pressure to innovate is doubled by today’s business climate. Qualiflow, spun out of ASM International in 1997, took off at a dead run. Between 1998 and 2001, its revenues grew from about $2.5 million to about $16.8 million (converted from euros to U.S. dollars), split between the optical fiber and semiconductor markets. Of course like everyone else, that dead run has hit a brick wall—the company estimates 2002 revenue to be between $5.8 million and $7.85 million.

But the company has maintained a strong cash position and R&D spending. At current industry spending levels, Qualiflow can maintain its investment levels and continue on for the next two years, according to its CEO. “We believe we will come out [of the downturn] very well positioned … we still have a lot of money in our bank account,” Jacquemin said.

In its brief history Qualiflow has looked for partners outside of Europe to supply advanced technology, notably in Korea and Japan. In Japan it has taken a 33 percent equity stake in liquid MFC supplier Lintec. Liquid mass flow control is a key technology for both next-generation IC and optical fiber markets, Jacquemin said.

There are still market niches such as fluid control where there is room for innovation and a market insertion point for Qualiflow, he said. MFC sensors is another area where Qualiflow sees an opportunity to grow market share.

“Everybody is bringing new technology. We have our solid-state sensor. Do we have the best solution? I don’t know. But the market is demanding … new ways of sensing,” Jacquemin said.

Qualiflow has four product lines: MFCs, valves, gas and vacuum cabinets, and vaporization systems. While it has 20 percent market share in gas cabinets—primarily from the optical fiber market and French telecomm provider Alcatel—Qualiflow has only begun to scratch the MFC market with a 2 percent share of the market.

The company thinks it can increase that share to about 8 percent within three to four years with its next-generation MFC that it plans to introduce next year, said Pascale Garnier, Qualiflow’s marketing director.

Dubbed Helotis, Qualiflow’s next-generation MFC will contain an improved version of the solid-state sensor first unveiled in its AFC 90MD component last year. Solid state sensors have proved troublesome, as MFC suppliers have experimented with stainless steel tubes and struggled with materials and cleanliness requirements, said Jean Frey, Qualiflow’s director of R&D.

“We are correcting these problems, and we should come out with a reliable product next year,” Frey said. Utilizing thin-film technology, the successful trick has been to make the sensor smaller with more stable materials, such as platinum, he said.

In terms of valves, Qualiflow is developing a high-flow, high-temperature diaphragm valve with a piezoelectric activator base.

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.