About MKS Instruments

MKS Instruments, Inc. (MKS) delivers foundational technology solutions to leading edge semiconductor manufacturing, electronics and packaging, and specialty industrial applications. The company applies its broad science and engineering capabilities to create instruments, subsystems, systems, process control solutions and specialty chemicals technology that improve process performance, optimize productivity and enable unique innovations for many of the world's leading technology and industrial companies. The company's solutions are critical to addressing the challenges of miniaturization and complexity in advanced device manufacturing by enabling increased power, speed, feature enhancement and optimized connectivity. These solutions are also critical to addressing ever-increasing performance requirements across a wide array of specialty industrial applications. The company enables technologies that transform its world. Markets and Applications The company focuses on satisfying the needs of its customers by establishing long-term collaborative relationships. The company has a diverse base of customers across its three end-markets, semiconductor, electronics and packaging, and specialty industrial. The company has developed the following two product strategies that have been instrumental in delivering value to its customers and helping them solve their most complex problems: The company's Surround the Wafer offering includes a wide range of products, design and development services, system-level integration, training programs, calibration, service, and repair for its semiconductor customers. This unique combination of products and services enables the company's customers to solve the challenges of ultra-thin layers, new materials and complex 3D structures while maintaining quality and productivity levels. The company has cultivated this strategy over the past two decades by adding critical enabling technologies to its portfolio. The Surround the Wafer offering is an update from what the company previously referred to as Surround the Chamber, given its broadened exposure in photonics solutions for lithography, metrology and inspection, which extends beyond just the vacuum chamber. The company's Surround the Workpiece offering includes product design and development, system-level integration, research and development, system, subsystem and component selection, and maintenance, repair and calibration services in the field of laser-based guidance and control for manufacturing processes. In connection with the Atotech Acquisition, the company introduced an extension of the Surround the Workpiece offering called Optimize the Interconnect, which refers to MKS' combined laser drilling and chemistry solutions geared towards accelerating innovation and customers' time-to-market in printed circuit board (PCB) and package substrate manufacturing. At its core, MKS is a foundational enabler of miniaturization and complexity. There are three secular trends benefiting MKS. First is the impact of a world that continues to be increasingly interconnected, driving the need for smaller, more powerful and feature-rich advanced electronic devices, which is enabled by semiconductor manufacturing, laser processing and chemistry solutions. Second is the increasing complexity of technology transitions in semiconductor, PCB and package substrate manufacturing, which leads to inflections, such as extreme vertical structures and process engineering at the atomic level, as well as increased interconnect density and smaller features. These inflections provide additional growth opportunities for MKS, as the company is uniquely positioned to deliver the broadest and deepest portfolio of solutions. Third is the accelerating need for laser-based precision manufacturing techniques, which are enabled by lasers, photonics, optics, precision motion control, vibration control and systems solutions. Semiconductor Market MKS is a critical solutions provider for semiconductor manufacturing. The company's products are used in major semiconductor processing steps, such as deposition, etching, cleaning, lithography, metrology, and inspection. The semiconductor industry continually faces new challenges, as products become smaller, more powerful and highly mobile. Ultra-thin layers, smaller critical dimensions, new materials, 3D structures, and the ongoing need for higher yield and productivity drive the need for tighter process measurement and control, all of which MKS supports. The company is the broadest critical subsystem provider in the wafer fabrication equipment ecosystem and address over 85% of the market. The company has characterized its broad and unique offering as Surround the Wafer to reflect the technology enablement it provides across almost every major process in semiconductor manufacturing today. The semiconductor market is subject to rapid demand shifts, which are difficult to predict. Approximately 41% of the company's net revenues for 2023, were from sales to its semiconductor market. This decrease from 2022 to 2023 was primarily a result of the full-year impact of the Atotech Acquisition, as MSD only sells into the company's electronics and packaging and specialty industrial markets. Electronics and Packaging Market MKS is a foundational solutions provider for the electronics and packaging market. The company's portfolio includes photonics components, laser drilling systems, electronics chemistries and plating equipment that are critical for the manufacturing of PCBs and package substrates, and critical to wafer level packaging (WLP) applications. Similar to the semiconductor industry, the PCB, package substrate and WLP industries increasingly demand smaller features, greater density, and better performance. In addition, the electronics and packaging market also includes sales of the company's vacuum and photonics solutions for display manufacturing applications. The company characterizes its complementary offering of laser systems and chemistry solutions as Optimize the Interconnect, to reflect the unique technology enablement it provides at the interconnect level within PCBs, package substrates and WLPs. Specialty Industrial Market MKS' strategy in specialty industrial is to leverage the company's domain expertise and proprietary technologies across a broad array of applications in industrial technologies, life and health sciences, and research and defense markets. Industrial Technologies Industrial technologies encompasses a wide range of diverse applications, including chemistries for functional coatings, surface finishing and wear resistance in the automobile industry, vacuum solutions for synthetic diamond manufacturing and photonics for solar manufacturing. Other applications include vacuum and photonics solutions for light emitting diode and laser diode manufacturing. Life and Health Sciences The company's products for life and health sciences are used in a diverse array of applications, including bioimaging, medical instrument sterilization, medical device manufacturing, analytical, diagnostic and surgical instrumentation, consumable medical supply manufacturing and pharmaceutical production. Research and Defense The company's products for research and defense are sold to government, university and industrial laboratories for applications involving research and development in materials science, physical chemistry, photonics, optics and electronics materials. The company's products are also sold for monitoring and defense applications, including surveillance, imaging and infrastructure protection. International Markets A significant portion of the company's net revenues is from sales to customers in international markets. For 2023, international net revenues accounted for approximately 66% of the company's total net revenues. A significant portion of the company's international net revenues were from sales to customers in China, Germany, Japan and South Korea. Segments, and Product and Service Offerings The company operates through three divisions: the Vacuum Solutions Division (VSD), the Photonics Solutions Division (PSD) and the Materials Solutions Division (MSD). MSD represents the Atotech business and was established following the Atotech Acquisition. The company groups its product offerings by its reportable segments: VSD, PSD and MSD. Global Service represents the company's service offerings and consists of total services for all three of its reportable segments. VSD delivers foundational technology solutions to leading edge semiconductor manufacturing, electronics and packaging and specialty industrial applications. VSD products are derived from the company's core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery and vacuum technology. Its products include: Pressure and Vacuum Control Solutions Products, which consist of direct and indirect pressure measurement. Materials Delivery Solutions Products, which include flow and valve technologies, as well as integrated pressure measurement and control subsystems, which provide customers with precise control capabilities. Power Solutions Products, which consist of microwave and radio frequency power delivery systems, radio frequency matching networks and metrology products. The company's power delivery solutions are used to provide energy to various etching, stripping and deposition processes. Plasma and Reactive Gas Products, which consist of remote plasma and ozone generators that create reactive species. A reactive gas is used to facilitate various chemical reactions in the processing of thin films, including the deposition of films, etching and cleaning of films and surface modifications. PSD provides a broad range of instruments, components and subsystems to leading edge semiconductor manufacturing, electronics and packaging and specialty industrial applications. PSD products are derived from the company's core competencies in lasers, photonics, optics, temperature sensing, precision motion control and vibration control. Its products include: Laser Products, which consist of continuous wave and pulsed nanosecond and ultrafast lasers based on diode, diode-pumped solid-state and fiber laser technologies. Photonics Products, which include precision motion control, optical tables and vibration isolation systems, photonic instruments, high-performance optics and optical assemblies, opto-mechanical components, temperature-sensing products for wafer fabrication systems, laser and LED measurement products, including laser power and energy meters and laser beam profilers and complex optical and photonic subsystems. Laser-based systems for PCB manufacturing, which include flexible interconnect PCB processing systems and high-density interconnect (HDI) solutions for the creation of blind micro-vias necessary for the manufacturing of PCBs (flexible, rigid-flexible, multilayer, HDI) and package substrates. MSD develops leading process and manufacturing technologies for advanced surface modification, electroless and electrolytic plating, and surface finishing. Applying a comprehensive systems-and-solutions approach, MSD's portfolio includes chemistry, equipment, software, and services for innovative and high-technology applications in its electronics and packaging and specialty industrial markets. Its products include: Advanced chemical processes, production equipment and software solutions, for the manufacturing of PCBs, package substrates and wafers used in smartphones, computers, other consumer electronics, server and data centers, automotive electronics, and the medical and industrial industries. Advanced chemical processes and production equipment for decorative and functional surface finishing, which include decorative, corrosion-protective, and wear-resistant coatings for various end markets, such as automotive, construction, energy, household appliance and heavy machinery. Advanced chemical processes for paint support applications, including pretreatment, stripping and overspray treatment for various end markets such as automotive, construction, aviation, heavy machinery and household appliance. Global Service includes: Installation services and training for many of the company's products. On-site services for maintenance and repair of equipment and critical subsystems. Technical support offices and technology centers located near many of the company's customers' facilities. Repair and calibration services at internal service depots and authorized service providers located worldwide. Warranties on the company's products that typically range from one to three years, with the majority of the warranties on its products ranging from one to two years. The company typically provides warranties on its repair services for periods ranging from 90 days to up to one year, depending upon the type of repair. The company also offers extended warranties on its products ranging from one to five years. Customers The company sells its products and services to thousands of customers worldwide, in a wide range of end markets. Net revenues from the company's top ten customers accounted for 30% of net revenues for 2023. Sales and Marketing The company's worldwide sales and marketing organizations are also critical to its strategy of maintaining close relationships with a wide array of customers across a diverse set of advanced applications, including semiconductor capital equipment manufacturers, semiconductor device manufacturers, PCB and package substrate manufacturers, and customers across a range of specialty industrial applications. The company markets and sells its products and services through its global direct sales organization, an international network of independent distributors and sales representatives, its websites and product catalogs. The company maintains a marketing staff that identifies customer requirements, assists in product planning and specifications, and focuses on future trends in the markets it serves. Research and Development The company's research and development expenses were $288 million for 2023. Competition For example, in VSD, Advanced Energy Industries, Inc. offers products that compete with the company's power solutions, plasma and reactive gas and photonics products. Inficon, Inc. offers products that compete with the company's pressure and vacuum control solutions products. Hitachi Ltd., Horiba Ltd., Brooks Instrument and VAT, Inc. offer products that compete with the company's materials delivery solutions products. In PSD, Trumpf Group, Lumentum Holdings Inc., IPG Photonics Corporation, EdgeWave GmbH and Amplitude Systemes SA offer products that compete with the company's laser products. Coherent Corp., Excelitas Technologies Corp., Jenoptik AG and Thorlabs, Inc. offer products that compete with the company's laser and photonics products. Sigma Koki Co., Ltd. and PI miCos GmbH offer products that compete with the company's photonics products. The company's laser-based systems for PCB manufacturing primarily compete with laser-based systems provided by Via Mechanics, Ltd., EO Technics Co., Ltd. and Mitsubishi Electric Corporation. In MSD, Element Solutions Inc., DuPont de Nemours, Inc., Uyemura, Dipsol Chemicals Co., Ltd., JCU International, Inc. and Okuno Chemical Industries Co., Ltd. offer products that compete with the company's chemistry products. Schmid Group, Process Automation International Limited and Manz AG offer products that compete with its plating equipment products. Patents and Other Intellectual Property Rights As of December 31, 2023, the company owned 690 U.S. patents and 3,121 foreign patents that expire at various dates through 2042. As of December 31, 2023, the company had 169 pending U.S. patent applications. Foreign counterparts of certain U.S. applications have been filed or may be filed at the appropriate time. Trade Compliance The company is subject to trade compliance laws in both the United States and other jurisdictions where it operates, including export regulations such as the U.S. Export Administration Regulations, administered by the U.S. Department of Commerce's Bureau of Industry and Security, and the International Traffic in Arms Regulation, administered by the Department of State's Directorate of Defense Trade Controls. Environmental Regulations The company is subject to various, federal, state, local and international laws and regulations relating to environmental protection, including those governing discharges of pollutants into the air, water and land, the reporting, generation, use, handling, storage, transportation, treatment and disposal of hazardous substances, waste and other materials and the cleanup of contaminated sites. These environmental regulations include the European Union Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals and the Toxic Substances Control Act in the United States. History MKS Instruments, Inc. was founded in 1961 as a Massachusetts corporation. The company was incorporated in 1961.