About Amtech Systems

Amtech Systems, Inc. operates as a global manufacturer of capital equipment, including thermal processing and wafer polishing, and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power devices, analog and discrete devices, electronic assemblies, and light-emitting diodes (LEDs). The company sells these products to semiconductor device and module manufacturers worldwide, particularly in Asia, North America, and Europe. The company's strategic focus is on semiconductor growth opportunities in power electronics, sensors and analog devices leveraging its strength in its core competencies in thermal and substrate processing. The company is a market leader in the high-end power chip market (SiC substrates, 300mm horizontal thermal reactors, and electronic assemblies used in power, RF, and other advanced applications), developing, and supplying essential equipment and consumables used in the semiconductor industry. Segments The company operates through two segments, Semiconductor, and Material and Substrate. These segments are consisted of the following six wholly-owned subsidiaries: Semiconductor: Bruce Technologies, a Massachusetts corporation based in North Billerica, Massachusetts; and BTU, a Delaware corporation based in North Billerica, Massachusetts, with operations in China, Malaysia and the U.K. Material and Substrate: PR Hoffman, an Arizona corporation based in Carlisle, Pennsylvania; Advanced Compound Materials, Inc.; Intersurface Dynamics, a Connecticut corporation based in Bethel, Connecticut; and Entrepix, Inc. (Entrepix), an Arizona corporation based in Phoenix, Arizona. The company's strategic focus in the semiconductor industry is the development of equipment for thermal processing and deposition for semiconductor manufacturing, specifically focusing on substrate, fabrication, packaging and surface-mount technology (SMT). The markets the company serves are experiencing technological advances and are, historically, cyclical. The company's thermal processing and consumable products address the diffusion and deposition steps used in the fabrication of semiconductors, LEDs, MEMS and the polishing of newly sliced silicon and compound semiconductor wafers, as well as the packaging and assembly of the electronic components and assemblies. The company's reflow ovens provide key thermal processing steps for both semiconductor packaging and electronics assembly. Key end-markets for these packages and assemblies include electric vehicles and charging infrastructure, renewable energy, communications, automotive electronics and sensors, computing and networking, and consumer and industrial electronics. The company's Material and Substrate segment provides solutions to the lapping and polishing marketplace for SiC power chip applications, LED, optics, ceramics and photonics. Lapping and polishing are the processes of abrading components with a high degree of precision for flatness, parallelism, and surface finish. Common applications for this technology are silicon wafers for semiconductor products, compound substrates, like silicon carbide wafers, for LED and power device applications, sapphire substrates for LED lighting and mobile devices, various glass and silica components for 3D image transmission, quartz and ceramic components for telecommunications devices, medical device components and optical and photonics applications. The company's customers use its equipment to manufacture semiconductor chips, silicon and compound semiconductor wafers and MEMS, which are used in end markets, such as telecommunications (5G), consumer and industrial electronics (IoT and embedded devices), computing (data centers), automotive electronics and sensors (xEV), and mobile devices (smart devices). To complement the company's research and development efforts, it also sells its equipment to, and coordinate certain development efforts with, research institutes, universities and customers. Acquisitions On January 17, 2023, the company acquired 100% of the issued and outstanding capital stock of Entrepix, an Arizona based manufacturer of chemical mechanical polishing (CMP) technology. Entrepix's CMP technology portfolio and water cleaning equipment complements the company's existing substrate polishing and wet process chemical offerings. Entrepix's results of operations are included in the company's Material and Substrate segment from the date of acquisition. On March 3, 2021, the company acquired 100% of the issued and outstanding capital stock of Intersurface Dynamics, a Connecticut-based manufacturer of substrate process chemicals used in various manufacturing processes, including semiconductors, silicon and compound semiconductor wafers, and optics. Intersurface Dynamics' results of operations are included in the company's Material and Substrate segment from the date of acquisition. Strategy The key elements of the company's strategy are to increase the portion of its product line portfolio tied to high-growth, megatrend end markets, such as EV; emphasize and prioritize customer-centric product development in all of its divisions; and enhance and invest in legacy business operations. The company's strategy to enhance its sale of wafer carriers and templates includes developing new applications in close collaboration with its customers, continuous improvement of its existing products and providing a high level of customer support and products that deliver greater value to its customers. Semiconductor and Material and Substrate Operations The company provides diffusion and reflow thermal systems, as well as wafer polishing equipment and related services to leading semiconductor manufacturers. The company's products include horizontal diffusion furnaces used to produce semiconductors, such as analog, sensors, and discrete devices; and MEMS, as well as double-sided lapping and polishing equipment, double-sided lapping and polishing carriers, and single side polishing templates. Semiconductor Products The company's furnace equipment is manufactured in its facilities in Massachusetts and China and via contract manufacturers in Canada and Mexico. The following paragraphs describe the products that comprise its product lines in its semiconductor business: Continuous Thermal Processing Systems: The company produces and sells thermal processing systems used in the solder reflow and curing stages of printed circuit board assembly, as well as systems for the thermal processes used in advanced semiconductor packaging. The company's printed circuit board assembly products are used primarily in the advanced, high-density segments of the market that utilize surface mount technology. Flip-chip reflow provides the physical and electronic bond of the semiconductor device to its package. The company's range of convection reflow systems, utilizing patented closed loop convection technology, are rated at up to 400°C and operate in air or nitrogen atmospheres. These products are manufactured at the company's ISO 9001:2015 certified facility in Shanghai, China; and utilize forced impingement convection technology to transfer heat to the substrate. Using configurable heating elements of up to eight kilowatts, they can process substrates in dual lane, dual speed configurations, thereby enabling the company's customers to double production without increasing the machine's footprint. These products are available in four models based on the heated lengths of thermal processing chambers. Heated length is based on the required production rate and loading requirements. High-Temperature Belt Furnace: The company also produces and sells high-temperature belt furnaces, which have been manufactured in Massachusetts for over six decades with ISO 9001:2015 quality certification safe-guarding that each unit is subject to exacting build and test criteria. These furnaces operate at temperatures up to 1180°C and are capable of processing in controlled atmospheres, such as nitrogen, argon and hydrogen. Applications include direct bond copper (DBC), furnace brazing, annealing, glass to metal sealing, sintering and heat-treating for diverse markets, including automotive, semiconductors, aerospace and medical. Horizontal Diffusion Furnaces: The company produces and sells 200mm and 300mm horizontal diffusion and deposition furnaces. Its horizontal furnaces address several steps in the semiconductor manufacturing process, including diffusion, high temperature oxidation (used in silicon power chips), and annealing. The company's horizontal furnaces generally consist of three large modules: the load station, where the loading of the wafers occurs; the furnace section, which consists of one to four thermal reactor chambers; and the gas distribution cabinet, where the flow of gases into the reactor chambers is controlled and is often configured through a range of options to meet the requirements of the company's customers' particular process needs. The horizontal furnaces utilize a combination of existing industry and proprietary technologies and are sold primarily to semiconductor customers. The company's products are capable of processing all existing wafer sizes. Future Semiconductor Products The following paragraphs describe products in the final stages of development that the company expects to begin offering to customers during fiscal year 2024 as part of its Semiconductor product lines: Reflow: The company has begun a project to eventually replace the Pyramax reflow product with a next-generation platform. This updated platform will address areas of the market not served by the Pyramax line and provide existing customers with additional enhancements and capabilities. This next-generation platform will be launched in mid-2023 with full production commencing early 2024. Material and Substrate Products segment The company's Material and Substrate segment manufactures the products described below in Arizona, Pennsylvania and Connecticut and sells them under the company's Entrepix, PR Hoffman, and Intersurface Dynamics brand names. Double-Sided Wafer Cleaning System: The Entrepix Double-Sided Wafer Cleaning System (OnTrak) is a single wafer cleaner that uses water or mild chemistries supplied through PVA brushes to clean both sides of a substrate simultaneously. These wafers require cleaning following various process steps that leave the substrate contaminated by material particles. The system is designed to accept wet wafers in and send each substrate through two brush cleaning steps followed by a rinse and a spin dry while also providing heat via a high-powered lamp to dry any residual liquid droplets. The Entrepix cleaner is commonly used in post polishing steps, prime silicon/silicon carbide cleaning, epitaxial silicon deposition processes, and general wafer cleaning needs. Entegrity Head Tester: The Entrepix Entegrity Head Tester is a table-top CMP head testing system that provides the company's customers with invaluable data regarding their head consumables that make up the polishing heads. The system allows users to customize operation and recipe programming. This allows the user to test individual zones for leaks or cross talk and track each head's performance by generating data that can be used to track issues with head rebuild before it is installed on the polisher. The Entegrity's user friendly touch interface displays data in real time, and also provides a live graph of the individual zone's performance. The ability to scan each head barcode prior to testing allows the user to create a data set for each specific head that can be viewed on the screen or downloaded via network connection. Substrate Carriers: The company manufactures carriers in a variety of sizes and materials. Sizes range from 3 to 38 inches in diameter using a variety of special steels, laminates and extruded polymer raw materials. Silicon wafers, compound semiconductor wafers, and large optics require these special insert carriers. These carriers combine the strength of hardened steel as the processing backbone with a softer plastic material in the work holes known as an insert. Inserts are permanently molded into the work holes via a pressurized process. These inserted work holes provide smoother processing, improved wafer total thickness variation (TTV) and improved wafer edge quality. Insert carriers are available for all wafer sizes from 75mm to 450mm and can be made from hardened and tempered carbon steel or specialized stainless steel when metal contamination is a processing concern. Insert carriers are widely accepted as the industry solution for both prime wafer and reclaim wafer manufacturers when dual sided lapping or polishing are utilized in their front-end wafer process. Substrate Polishing Templates: The company's polishing templates are used to securely hold silicon carbide (SiC), silicon, sapphire or other wafer materials in place during single-sided wax-free polishing processes. Polishing templates are customized for specific applications and are manufactured to extremely tight tolerances. The company offers a variety of options to provide the best solution for each specific process. Polishing templates are manufactured for all brands of tools and virtually any wax-free customer process. Critical front-end wafer surface specifications are finalized during the polishing process. Single-Sided Polisher: The company has developed a new single-side batch polisher to specifically to address the challenges in polishing compound semiconductor substrates, such as silicon carbide. This system is also under evaluation, including additional testing and documentation. Substrate Process Chemicals: Through Intersurface Dynamics, the company produces and sells substrate process chemicals, which are used to achieve specific surface morphologies on a variety of materials. The company's substrate process chemical customers include some of the world's largest manufacturers of semiconductor devices, silicon wafers, precision optics, ophthalmic lens, advanced displays and flat glass. The company offers three different product lines: Tensor Series Products, Vector Series Products, and Challenge Series Products. Tensor Series Products are used by manufacturers of integrated circuits in applications, such as cleaning, etching, dicing and CMP. Vector Series Products were designed specifically for grinding, sawing, lapping, cleaning, etching and polishing semiconductor materials, such as silicon wafers. Challenge Series Products address similar processes for manufacturers of precision optics, technical ceramics and advanced displays helping to achieve optimum yields. Customers The company's customers are primarily manufacturers of semiconductor substrates and devices and electronic assemblies. Additionally, its Material and Substrate segment serves customers in the ceramics and optics industries. During 2023, 52% of the company's net revenue came from customers outside of North America. In 2023, net revenue was distributed among customers in different geographic regions as follows: 48% in North/South America (39% of which is in the United States); 31% in Asia(including 14% in China, 5% in Taiwan, and 6% in Malaysia); and 21% in Europe (including 5% in Czech Republic, 4% in Austria and 2% in Germany). One Semiconductor customer accounted for 11% of the company's net revenues in 2023. Sales and Marketing Due to the highly technical nature of the company's products, it markets the company's products primarily by direct customer contact through its sales personnel and through a network of domestic and international independent sales representatives and distributors that specialize in semiconductor equipment and supplies. The company's promotional activities include direct sales contacts, participation in trade shows, advertising in trade magazines and digital marketing, including website SEO and pay-per-click advertising. The company uses a mix of direct sales, representatives and distributors globally. Manufacturer representatives provide sales coverage in specific geographic regions and are paid a commission when products are sold. Sales to distributors are generally on terms comparable to sales to end-user customers, as its distributors generally quote their customers after first obtaining a quote from it and have an order from the end-user before placing an order with the company. The company's manufacturer representatives and distributors are closely managed by its global sales team. Research, Development and Engineering For the year ended September 30, 2023, the company's research and development expenses included $7.3 million. Competition The Semiconductor and MEMS Markets Competitors of the company's horizontal diffusion furnaces include Centrotherm GmbH and CVD Equipment, Inc. The company's principal competitors for printed circuit board assembly equipment and advanced semiconductor packaging vary by product application. The principal competitors for solder reflow systems are ITW/EAE Vitronics-Soltec, Heller, Folungwin, ERSA, Shenzhen JT Automation Equipment Co., Ltd. and Rehm. The principal competitors for advanced semiconductor packaging are ITW/EAE Vitronics-Soltec and Heller. The company's in-line, controlled atmosphere furnaces compete primarily against products offered by Centrotherm and SierraTherm/Schmid Thermal Systems. Intersurface Dynamics competes with much larger companies, such as Entegris, Inc. and Cabot. History The company was founded in 1981. It was incorporated in 1981. The company was formerly known as Quartz Engineering & Materials, Inc. and changed its name to Amtech Systems, Inc. in 1987.