Intel May Be Pushing Applied to Buy ASMI
David Lammers, News Editor -- Semiconductor International, 6/9/2008 10:37:00 AM
 |
Last Friday, both ASMI and Applied issued press releases saying that Applied had offered $400-500M for ASMI’s atomic layer deposition (ALD) and plasma-enhanced chemical vapor deposition (PECVD) activities. ASMI said it would respond by the end of this week.
Gartner Inc. semiconductor manufacturing analyst Dean Freeman said Applied has several motivations for the bid. ASMI has ALD patents which Applied may need as it broadens its own ALD thrust, he said.
While Intel Corp. (Santa Clara, Calif.) does not comment publicly about its vendors, Freeman said he believes ASMI gained ALD business at Intel for the high-k dielectric deposition, and in PECVD for low-k dielectrics.
“Applied’s offer may be to take care of the patent licensing issues. Or, Intel may have come in and said to Applied, “This might be a good idea for you to take care of. Intel has a way of marrying small companies that have technology they want with larger suppliers. With all the distractions taking place right now at ASMI, that wouldn’t surprise me,” Freeman said.
To be sure, Applied has not ignored the ALD business, which Freeman estimates will roughly double between 2008 and 2012. Applied has used its Centura platform to offer its Advanced Gate Stack solution, which combines high-k ALD and decoupled plasma nitridation (DPN) with oxidation and annealing chambers. For tungsten deposition to fill contacts and vias, Applied offers its Centura iSprint Tungsten ALD/CVD system, which combines ALD tungsten nucleation layer technology with CVD tungsten bulk fill.
Freeman said Applied may broaden its ALD offering at the upcoming SEMICON West show. Applied’s modus operandi is to get several beta tools out in the field, establish its technology with key customers, and then make a public announcement. That may come at Semicon West, he said adding that “it is hard to tell where Applied is at since they are not being very forthcoming.”
Hitachi Kokusai Electric Inc. (Tokyo) has developed a multi-wafer ALD process for silicon nitride deposition that has been well accepted by memory vendors. Thus far, the market leader in single-wafer ALD is Jusung Engineering Co. (Gwangju, Korea). ASMI has solid positions in both ALD and PECVD, markets which are set to expand as ALD further penetrates both DRAM and logic dielectric deposition. After the 32 nm generation, logic vendors may adopt ALD for metal electrode deposition, with the seed layer in particular requiring ALD. At the 22 nm node, NAND flash vendors are likely to require ALD for interpoly dielectric deposition.
 |
 |
That raises the question whether the $400-500M bid is attractive to ASMI’s board. Its ALD business of ~$54M in 2007 comes on a narrow base of Intel and perhaps a few other leading edge customers. Its PECVD business, estimated by Gartner at $61M last year, also counts on Intel, a company which switches vendors often from one generation to the next.
 |
| ASMI's Stellar 3000 is a single-wafer plasma-enhanced ALD volume manufacturing tool for both high-k dielectric and metal electrode deposition. |
In metal and low-k, Applied presents tough competition. “ASMI probably won’t have much success in breaking Applied’s stranglehold on the metal business,” Freeman said, adding that metal electrodes will transition to an ALD and PVD solution before moving to a strictly ALD solution.
The technology and patent considerations are complicated by the management situation at ASMI, where founder Arthur del Prado recently passed on the CEO reins to his son Charles del Prado. Investor groups which have large stakes in ASMI have called for the ouster of Charles del Prado, proposing that the front-end equipment business be run by Farhad Moghadam, a former senior vice president at Applied Materials who left soon after Tom St. Dennis was named as head of Applied’s silicon solutions group.
Freeman said another former senior Applied executive, David N.K. Wang, former CEO of Chinese foundry Hua Hong NEC Electronics Co. (HHNEC, Shanghai), may be playing an advisory role to ASMI.
Freeman said Applied’s offer of $400-500M is roughly four times the value of the annual revenues for ASMI’s ALD and PECVD tools, which he said “appears to be a fair price.” However, selling off those two attractive product lines would leave the furnace and epitaxy businesses to be dealt with, raising the question whether management would divide the company into pieces.
“It is only natural for ASMI’s investors to think that management should be doing better. They have their investors upset with them, so anything could happen. At the same time, ASMI management is adamant that they will continue to run the company the way they see best. The founder still is in charge, and we will have to see what they decide to do with it as they go forward.”
