Micrion $60M FIB order to double its yearly sales

Electronic News, March 25, 1996

Peabody, Mass.--Micrion's focused ion beam (FIB) systems are moving from the laboratory to the production floor, to the tune of a $60 million order, possibly from Fremont, Calif.-based Read-Rite Corp.

Micrion will more than double its yearly sales with this order alone--fiscal 95 sales were $28 million--and expects to tell the world shortly how it plans to increase capacity to accommodate the order. The company would not disclose who the customer is, other than to say it is a U.S. manufacturer who is ordering rugged-design FIB systems for a production application.

One industry analyst believes the customer is Read-Rite, a disk drive manufacturer. Mark FitzGerald, senior technology analyst for Hambrecht & Quist, San Francisco, deduced that the order is going to Read-Rite and has Micrion on a "buy" rating, as opposed to most of the "holds" he has in his semiconductor equipment group.

In fact, Mr. FitzGerald was downright excited at the outlook for Micrion with this order. "It's one of my 'favorite ideas' in the group right now. Here you have an emerging technology that just found a significant production application.

"Micrion has two other competitors in the world (FEI Co. of Hillsboro, Ore., and a Japanese division of Seiko) and those two companies are I would say 12 months away from having an FIB system ready for use in production." Mr. FitzGerald said.

"Micrion's FIB technology wins. Other companies have to go along. Seagate, Quantum, they have to put this technology in place." Mr. FitzGerald said. "I like it too because this is equipment not tied to fluctuating spending cycles. It's going to grow even in a period of slower growth."

Micrion said they have been working with the unnamed customer for at least two years. Micrion had previously developed a rugged-design FIB system, so only a few equipment modifications--that are complete and tested--were needed for the customer's needs.

Mr. FitzGerald believes Read-Rite will be using the systems for a "trimming operation" in producing disk drive heads. Last October, Read-Rite completed the financing of $100 million in debt (EN, Oct. 9, 1995). Coincidentally, in announcing this order, Micrion said $10 million of it had been placed in the same month, but not accounted for until this year.

Micrion has never had an order of this size. Before, the bigger semiconductor companies would order one for a lab, or one for defect analysis, the company said. The systems will sell for almost $1 million each.