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Advanced Energy Industries Quiet Power Behind Gear Makers Advanced Energy Industries is a power broker in the literal sense. Since Douglas Schatz and Brent Backman opened the company's doors in 1981, Advanced Energy has quietly gone about the business of supplying DC and RF power products to the industry's gear makers. However being quiet won't cut it anymore since Advanced Energy went public in December 1995. "Being a private company we didn't care (about being noticed); being a public company there are different rules," says Jim Usher head of the AEI's semiconductor business unit. Those different rules come from the stock market, which has soured on equipment stock in recent months as possibly the worst industry downturn since 1974 has hit the semiconductor industry. The downturn has pushed Advanced Energy from October 1997 highs in $35 range to lows around $11. Despite the industry slowdown and market perception, AEI posted $36.7 million in first quarter 1998 revenues, up 77 percent from $20.7 million in the year ago quarter. Sequentially, revenues did drop 20 percent from the fourth quarter, however gross margins remained in the 30 percent range at 30.3 percent versus 36.3 percent in the first quarter of 1997 and 37.6 percent in the fourth quarter of 1997. In terms of visibility, Advanced Energy recently made noise by signing a merger agreement with the No. 3 competitor in power converters, RF Power Products. And according to Mr. Usher, the power product supplier plans to be more vocal and visible player in the marketplace. Some of this new attitude will be on display at Semicon/West in San Francisco, where AEI will unveil its Apex product line. Advanced Energy's beginnings are closely tied with the needs of the thin film industry. Advanced Energy's products have come to fit well with emerging semiconductor applications. At its founding, the company began selling ion beam milling and etching specific power supplies. Ion beam milling and etching was being used in R&D at IBM and Motorola for development of semiconductor processes for both thin film heads and IC manufacturing. It was at this time that Advanced Energy's proximity to thin film process developers "positioned the company to get to know a lot of other companies in advanced R&D," says Mr. Usher. The company sold its ion beam milling and etching power converters to equipment users such as Ion Technology, Commonwealth and Veeco Instruments. When the need for smaller and smaller geometries, pushed physical vapor deposition to the forefront, knocking out electron beam systems used to vaporize aluminum for a variety of processes, Advanced Energy stepped in by supplying then-vocal player Temescal Material Research, Varian Associates, and later, Applied Materials, with power converters. In the PVD product transition, Advanced Energy created DC power supplies "specifically tailored to provide higher power in smaller packages, reduced what a fork lift must pick up so a person could carry it," says Mr. Usher. AEI developed the MDX power supply in 1983-1984. The product has been in demand for a number of years and is still sold today. "Hard to kill a good product, even though we have better ones," says Mr. Usher who adds that MDX fueled "a huge growth spurt for us, from early 1986 to 1995." In 1985, sales revenue was $4 million. By 1987, MDX was tabbing large orders, like the 600 system MDX order of Seagate Technology. Seagate was in the midst of transferring from electro deposition to PVD. By 1992, Advanced Energy sales hit $22 million with MDX as its primary driver. In 1992, the company developed RF technology, an 13.56HHz RF generator called RFG. According to Mr. Usher, it would become the main product used for LAM research TCP 9600, 9400 etching tools as well as other CVD suppliers like Applied Materials, Balzers, Leybold, Ulvac and Hitachi. The company went public in December 1995. By 1996 sales grew to $99 million. In 1997, AE sales reached $141.9 million. In fiscal 1997, AE tabbed 59 percent of its sales from the semiconductor equipment industry. According to Lehman Brothers, Applied Materials and Lam Research accounted for 45 percent of sales. The company commands 39 percent share of the power converter market, according to Lehman Brothers. AE's chief competitors are ENI (25 percent) and RF Power Products (10 percent). However, those ranks will shrink if AE's proposed acquisition of RF Power Products reaches fruition. AEI will unveil its "first fully integrated 13.56MHz RF power delivery system," July 13-15, at Semicon/West. Advanced Energy claims the Apex system provides power repeatability, increased reliability and lower cost through the integration of the 13.56MHz power amplifier, impendance match, and built-in VI probe. According to the company, the Apex single-package design achieves these benefits by significantly reducing the number of parts over existing RF power delivery systems. The system incorporates SwitchMatch, a selectable fixed impedance match using pin diodes. By directly delivering the RF power to the source, the Apex system completely eliminates the 10-25 percent power loss inherent in typical component configurations, according to AEI. The company contends that Apex provides accurate delivery of set point power because the power amplifier, SwitchMatch and VI Probe are installed directly at the load. "A user then can measure and regulate plasma impedance changes through closed loop control signals back to the generator," the company claims. The mean time between failure (MTBF) of Apex exceeds 200,000 hours, according to the company. The single package Apex system is close to 50 percent smaller in size than previous AE component systems. The Apex product platform is available in power ranges of 1kW to 10kW, and frequencies of 13.56MHz and 27.12MHz. Apex has been in alpha and beat testing at several customers. "We expect the Apex product line with its built-in SwitchMatch and VI sensor technology to carry us into the 300mm tool requriements," says Mr. Usher. Apex is also targeted at improving 200mm lines as well. |