About Ultra Clean Holdings

Ultra Clean Holdings, Inc. (UCT) operates as a developer and supplier of critical subsystems, components, parts, and ultra-high purity cleaning and analytical services primarily for the semiconductor industry. UCT offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping and part and component manufacturing, as well as tool chamber parts cleaning and coating, and micro-contamination analytical services. The company ships a majority of its products and provides most of its services to the U.S. registered customers with locations both in and outside the U.S. In addition to the U.S. manufacturing and service operations, the company manufactures products and provides parts cleaning and other related services in its Asia Pacific, Europe and the Middle East (EMEA) facilities to support local and the U.S. based customers. The company conducts its operating activities primarily through its subsidiaries. Segments The company operates through two operating segments, Products and Services. The company’s Products segment primarily designs, engineers and manufactures production tools, components, parts, and modules and subsystems for the semiconductor and display capital equipment markets. Products include chemical delivery modules, frame assemblies, gas delivery systems, fluid delivery systems, precision robotics and process modules, as well as other high-level assemblies. The company’s Services segment provides ultra-high purity parts cleaning, process tool part recoating, surface encapsulation and high sensitivity micro contamination analysis primarily for the semiconductor device makers and wafer fabrication equipment (WFE) markets. Suite of Offerings The company is a leading developer and supplier of critical subsystems, parts, components and ultra-high purity cleaning and analytical services primarily for the semiconductor industry. The company offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping and component manufacturing, tool chamber parts cleaning and coating and micro contamination analytical services. The company offers its customers: A vertically integrated solution for complex and highly configurable systems. The company provides its OEM customers a broad outsourced solution for the development, design, component sourcing and cleaning, prototyping, engineering, and manufacturing and testing of advanced systems. The company utilizes its weldment and frame fabrication capabilities together with highly specialized engineering, global supply chain management, and assembly capabilities to produce high performance products that are customized to meet the needs of the company’s customers and their customers. The company enables its customers to minimize their overall number of suppliers, simplify their supply chain and reduce their inventories. Parts and Components: The company offers its customers a wide range of gas delivery solutions, such as ultra-clean valves, high purity connectors, industrial process connectors and valves, pneumatic actuators, manifolds and safety solutions, hoses, pressure gauges, gas line and component heaters, as well as complex weldments. These products comply with the highest quality standards to ensure accelerated performance in a variety of demanding environments and applications in the semiconductor, oil and gas, chemical and refinery, power, transportation, analytical, and gas manufacturing markets. Subsystem Manufacturing: The company’s experience with the demanding requirements in semiconductor equipment manufacturing has enabled the company to become a leading developer and supplier of critical modules and subsystems. These assemblies include gas and fluid delivery solutions, wafer transport systems, mechatronic assemblies, and process modules. Improved Design-to-delivery Cycle Times: The company’s strong customer relationships and familiarity with their product requirements and the ever-changing needs of their customer base help the company reduces their design-to-delivery cycle times. The company seeks to optimize its supply chain management, design and manufacturing coordination and controls to respond rapidly to order requests, enabling the company to decrease product design and customization cycle times for the company’s customers. Because the company’s engineers work closely with its customers’ engineers and understand the fabrication, assembly and testing of their products, the company often can improve their design for manufacturability, thereby reducing their cost and improving their, quality and consistency. Testing Capabilities: The company utilizes its technical expertise to test and characterize key gas delivery products. The company has made significant investments in advanced analytical and automated test equipment, enabling the company to test and qualify key gas delivery sub-systems and components. The company can perform diagnostic tests, design verifications and failure analyses for its customers and suppliers. Increased Integration with OEMs through Local Presence: The company’s local presence in close proximity to the facilities of most of the company’s OEM customers enables the company to remain closely integrated with their design, development and implementation teams. This level of integration enables the company to respond quickly and efficiently to customer changes and requests. Precision Fabrication: The company designs and manufactures weldments and frames with exacting standards to meet or exceed its customers’ needs. UCT engages in the fabrication of complex gas delivery systems, which enables the company to provide cost competitiveness in the company’s vertical integration model. Custom Thermal Control: The company designs and manufactures heaters, sensors, and controllers for precise temperature control. These products are complementary to the company’s gas delivery systems products. Parts Cleaning and Coating and Analytical Verification: Through the company’s Services business, it offers integrated device manufacturers (IDM) customers validated, ultra-high purity process tool chamber parts cleaning and coating services. Included in these services are tool part process optimization solutions that could lower the total cost of ownership for the company’s customers. The company also offers analytical verification of process tool chamber part cleaning effectiveness and micro contamination analysis of tool parts, wafers and depositions, chemicals, cleanroom materials, deionized water and airborne molecular contamination. Strategy The company’s strategy is to grow its position and increase the company’s value to its customers as a leading solutions and service provider in the semiconductor markets the company serves, while serving a limited number of other technologically similar market opportunities. The company’s strategy is consisted of the following key elements: expand its solutions and service market share with semiconductor OEMs and IDMs; developing or acquiring solutions that allow the company’s customers to succeed at the leading edge of the semiconductor processing nodes; leveraging the company’s geographic presence in lower-cost manufacturing regions; providing production flexibility to respond rapidly to demand changes; driving profitable growth; continuing to selectively pursue strategic acquisitions; and strengthening vertical integration. Products The company designs, develops, prototypes, manufactures and tests subsystems, primarily for the semiconductor equipment market. The company’s products include precision robotic solutions, gas delivery systems, a variety of industrial and automation production equipment products, and subsystems that include wafer cleaning modules, chemical delivery modules, top-plate assemblies, frame assemblies, and process modules. The company also offers a wide range of parts and components, such as ultra-clean valves, high purity connectors, industrial process connectors and valves, pneumatic actuators, manifolds and safety solutions, hoses, gas delivery systems, and pressure gauges. Parts and Components: Includes ultra-clean valves, high purity connectors, industrial process connectors and valves, pneumatic actuators, manifolds and safety solutions, hoses, pressure gauges, gas line and component heaters, as well as complex weldments. These products comply with the highest quality standards to ensure accelerated performance in a variety of demanding environments and applications in the semiconductor and other gas manufacturing markets. Chemical Delivery Modules: Chemical delivery modules deliver gases and reactive chemicals in a liquid or gaseous form from a centralized subsystem to the reaction chamber. The module may be a gas delivery system in combination with liquid and vapor precursor delivery systems or may be a liquid delivery system in combination with a liquid storage system. Gas Delivery Systems: A typical OEM gas delivery system consists of one or more gas lines, consisted of weldments, filters, mass flow controllers, regulators, pressure transducers and valves, component heaters, and an integrated electronic and/or pneumatic control system. These systems are typically pallet mounted and are enclosed in a sheet metal encasing. The company’s gas delivery system designs are developed in collaboration with the company’s customers and are customized to meet the needs of specific processing requirements for OEMs. While several customers specify the full system bill of materials, many leverage the company’s design expertise to help them select the appropriate components for their particular system. Fluid Delivery System: A typical OEM liquid delivery system consists of one or more chemical delivery units, consisted of small diameter high purity PFA tubing, filters, flow controllers, regulators, component heaters, and an integrated electronic and/or pneumatic control system. These units are typically contained in a plastic enclosure and further integrated into a frame. The company’s liquid delivery system designs are developed in collaboration with the company’s customers and are customized to meet the needs of specific processing requirements for OEMs. Although several customers specify the full system bill of materials, many rely on the company’s design expertise and component characterization capabilities to help them select the appropriate components for their particular system. Precision Robotics: Precision robotic systems are used when accurate controlled motion is required. Some of the systems that employ robotic systems are semiconductor wafer and chip handling, wire bonding and industrial equipment. Process Modules: Process modules refer to the larger subsystems of semiconductor manufacturing tools that process integrated circuits onto wafers. Process modules include several smaller subsystems, such as the frame assembly, top-plate assembly and gas and chemical delivery modules, as well as the chamber and electronic, pneumatic and mechanical subsystems. Other High-level Assemblies: Other high-level assemblies refer to large subsystems used in semiconductor manufacturing, display, medical, energy, industrial and research industries. Services The company’s services business includes ultra-high purity process tool chamber parts cleaning and coating services, tool part life extension and process tool part optimization solutions, and micro-contamination analytical testing, primarily for the semiconductor device manufacturers and wafer fabrication equipment markets. Parts Cleaning and Coating: UCT offers customers validated, ultra-high purity outsourced process tool chamber parts cleaning and coating services. Included in these services are tool part process optimization solutions that can lower the total cost of ownership for the company’s customers. Micro-contamination Analysis: UCT also offers micro-contamination analysis of tool parts, wafers and depositions, chemicals, cleanroom materials, deionized water and airborne molecular contamination and provides analytical verification of process tool chamber part cleaning effectiveness. Customers The company sells its products and services primarily to customers in the semiconductor capital equipment and semiconductor integrated device manufacturing industries. The company also sells to the display, consumer, medical, energy, industrial, and research equipment industries. The majority of the company’s total revenue comes from the highly concentrated semiconductor capital equipment industry (OEM customers), so the company is dependent upon a small number of customers. The company’s two largest revenue customers were Applied Materials, Inc. and Lam Research Corporation, each of which accounted for more than 10% of the company’s total revenues in the year ended December 31, 2022. Approximately 92.2% of the company’s total revenues for the year ended December 31, 2022 came from multiple segments of the semiconductor industry, which include IDM, Foundry, OEM, and sub-tier suppliers. Customer Business Management The company sells and supports its products and services through its Customer Business Management organization. The company’s customer relationship directors are responsible for establishing sales strategies and setting the objectives for specific customer accounts. Each customer relationship manager is dedicated to a specific customer account and is responsible for maintaining strong working relationships with that customer, and in many cases provide on-site support. The company has dedicated New Business Development managers for both the company’s product and service businesses. They are responsible for initiating and developing long-term, multi-level relationships and work closely with the customers on new business opportunities. The company’s Customer Business Management organization includes technical sales support for order placement, spare parts quotes, production status updates, as well as service and maintenance contracts and analysis business. The company has a technical relationship representatives located at most of the company’s facilities. The company integrates new business wins into its facilities via a rigorous product transition process, working in concert with the company’s customers to ensure all production, cleaning and/or test requirements are identified, documented, and validated. The company employs the same process at all its sites, enabling products and service offerings to smoothly transition between the company’s facilities as needed to support customer demand. In addition, the company has developed an overall infrastructure to provide the company’s customers with service and support 24 hours a day, seven days a week. The company’s dedicated global field service engineers provide customer support through the performance of on-site installation, servicing and repair. Intellectual Property The company has over 100 patents with various expiration dates, and intellectual property that the company develops on behalf of its customers that is generally owned exclusively by those customers. Competition The company’s principal competitor for gas delivery systems is Ichor Systems, Inc. The company’s principal competitors for other critical subsystems are Flex Ltd., Foxsemicon Integrated Technology Inc., Jabil, Inc., Sanmina Corporation, Fujikin Incorporated, VDL ETG, and Celestica Inc. For the company’s gas delivery component solutions, the company’s principal competitors are Swagelok, Parker Hannifin, and Watlow. For the company’s services, cleaning and coating offerings, the company’s main competitors in the U.S. are Pentagon Technologies and Cleanpart; and in South Korea, KoMiCo. For analytical services, the company’s primary competitors are Balazs (an Air Liquide company) and Cerium Labs. History Ultra Clean Holdings, Inc., a Delaware corporation, was founded in 1991. The company was incorporated in 2002.