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ASM International N.V. (ASMI) is based in Bilthoven, the Netherlands. The company is an original equipment manufacturer (OEM) offering semiconductor manufacturing equipment used in the fabrication of integrated circuits (ICs). Its products are used in both the front- and back-end segments of the semiconductor production process. The front-end processes include all the steps necessary in manufacturing a wafer containing multiple copies of an IC device. The back-end processes involve the separation of the wafer into multiple individual semiconductor IC devices, followed by packaging and final testing. ASMI is the only semiconductor manufacturing company with a major presence in both the front- and back-ends of the $48.3 billion semiconductor manufacturing equipment market.

The front-end process begins with device formation. This process begins with a wafer (usually made of silicon) having a layer of photoresist (a chemical that hardens when exposed to an ultraviolet light source) spin-coated onto the surface in liquid form to drive off the excess solvent, and then "soft-baked" or cured. A photomask is then loaded into the lithography system. Photomasks, also called masks or reticles (if the mask is "stepped" across the wafer), are high-purity quartz or glass plates containing precise microscopic images that are used by a photolithography tool, also known as a stepper. An excimer laser is then passed over the photomask and through a reduction lens system that exposes the desired areas of photoresist, which is then subsequently removed, permitting deposition to the surface of the wafer. A strip system is utilized to remove the photoresist or other chemical residues following diffusion processing or film deposition. Thin layers of dopants are then grown or deposited in a precise pattern within the wafer using various chemical, vapor or ion implant techniques. The deposition process alters the atomic structure of the material, and therefore necessarily the electronic properties of the material. Further into the wafer fabrication process, a series of metallization steps are executed, in which conducting materials, that interconnect the semiconductor devices, are deposited. Multiple layers of conducting, semiconducting and insulating materials are constructed on and within the wafer via successive steps of lithography, etching and deposition, utilizing unique masks for each layer. Depending on the geometry and the device, anywhere from 35 to 45 unique masks are used in the device formation process with 10 to 100 layers (or more for microprocessors) being constructed. Typically, the outcome is a wafer with multi-layered semiconducting devices, known as transistors. The transistors are interconnected with conducting materials, and insulating materials are used to electronically isolate the active components. The net result is a silicon wafer that contains multiple copies of integrated circuit devices.


ASMI's front-end product portfolio includes various chemical vapor deposition (CVD) tools, vertical thermal reactors (ASM Europe's primary product), epitaxial reactors, and rapid thermal process (RTP) equipment. Its specific CVD equipment consists of plasma enhanced CVD (PECVD), low pressure CVD (LPCVD), and atomic layer CVD tools (ALCVD). RTP or annealing involves uniformly heating a semiconductor wafer in a precise manner to temperatures of up to 1,200 centigrade, followed by rapidly cooling the wafer. Annealing is necessary to lock-in the atomic structure at the wafer surface, since the doped material properties determine the operational electronic properties. RTP is typically performed after the implant process and prior to the metallization process. ASMI's front-end OEM operations are carried out through its ASM Europe, ASM America and ASM Japan subsidiaries. VLSI Research, an industry consultant, estimates the deposition market segment at $9.9 billion. ASMI has the market leading position in epitaxy, vertical furnace and plasma enhanced CVD. Front-end competitors include Applied Materials, Novellus, Tokyo Electron and Kokusai.


The back-end of the manufacturing process takes place after a wafer (usually silicon) has completed the device formation stage, in which multiple copies of an IC device have been constructed on a single wafer. A wafer prober then moves the wafer so that each IC device's electrical contact points are properly aligned with the probe card's pins, facilitating the parametric or functional testing of the device. Parametric testing is done both during and at the completion of the device fabrication process. Functional testing, completed after final construction, determines whether the device meets performance specifications (wafer sorting). Following the wafer sort, the wafer is cut or separated into individual die. Electrical leads are then attached to the die, followed by die encapsulation and packaging within an environmentally protective encasement. The purpose of the die package or encasement is to protect the semiconductor device from environmental elements and secure the electrical contacts to the protruding electrical leads. In addition, the encasement acts as a medium through which thermal energy or heat is dissipated from the die. A final test is then conducted on the chip. Wafer probers are used in wafer sorting applications roughly 85% of the time, while the rest are used in parametric testing. Thus most of the testing is done in the back-end of the fabrication process. Each probe card is custom-built for each specific wafer, as well as for the test equipment that accepts the probe card's electronic information. Functionally, this test equipment increases the efficiency of the manufacturing process through the detection and removal of defective semiconductor devices prior to final assembly. The primary challenges facing wafer prober and probe card manufacturers are the transition to larger wafers, the shrinking of device sizes, increasing throughput requirements, and devices running at greater speeds and lower power.


The company's back-end products include die attach tools, wire bonders, encapsulation tools, and assembly/test equipment. ASMI s back-end OEM operations are administered through ASM Pacific Technology, Ltd, which is 54.11% owned by ASMI. ASM Pacific Technology has operations in Hong Kong, Singapore, China and Malaysia. VLSI Research estimates the assembly market segment at $3.6 billion. ASMI currently has the leadership position in assembly and packaging tools. Back-end competitors include Shinkawa, ESEC, Apic Yamada, BESI, Towa, Shinko, Mitsui and Kulicke & Soffa.


ASMI recently completed the NuTool, Inc. and Genitech, Inc. acquisitions in June and August of 2004, respectively. NuTool via the LuminaCu platform provides integrated copper deposition and removal through the electrochemical mechanical deposition (ECMD) and reverse linear - chemical mechanical polishing (RL-CMP) technologies. Genitech, a Korean company, is a supplier of plasma enhanced ALCVD.

ASMI's front-end products comprise 47.1% of revenue, while its back-end tools accounted for the balance. One customer contributed 10.9% of total sales, while the ten largest customers accounted for a total of 36.5%. ASMI has penetrated the 16 largest semiconductor manufacturers. Approximately 63% of the company's revenue was generated in South East Asia, 11% came from Japan, 10% from North America, 10% from Europe and the remaining 6% from the rest of the world.

Below is a table that converts the yearly revenue and earnings per ADR (EPADR) figures into United States dollars (US$) at the weighted monthly exchange rate. Future periods use the current spot rate as a forward proxy. Note that there have not been any accounting adjustments made from the reported financial results and this presentation is for illustrative purposes only. ASMI reports all financial results in Euros ( ) using U.S. GAAP accounting rules.

Converted** Fiscal Year Revenue and EPADR

Year

Revenue

(US$ billions)

Pro forma

EPADR (US$)

GAAP

EPADR (US$)

Foreign

Exchange Rate


2003

$662 A

-$0.55 A

-$0.73 A

0.8842


2004

$937 A

$0.55 A

$0.64 A

0.8018


1Q05

$178 A

-$0.17 A

-$0.18 A

0.7574


2Q05

$230 A

$0.02 A

$0.01 A

0.7954


3Q05

$210 A

-$0.13 A

-$0.14 A

0.8303


4Q05

$279 A

-$0.02 A

-$0.02 A

0.8411


2005

$863 A

-$0.30 A

-$0.33 A

0.8033


2006

$1,035 A

$0.97 A

$0.85 A

0.8013




References

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