Start-ups have delivered many
innovative products. Some products – for
example, the excimer laser source for DUV photolithography from
Cymer and the capacitance manometer for pressure measurement from
MKS Instruments – have since become industry standards. Others, like
the sequential dielectric deposition system from Novellus and the
single-wafer plasma etcher from Lam Research, have helped the
industry push the technology to achieve higher levels of circuit
performance and lower cost.
||Some have become market
leaders. As a result, the industry has
developed from what was essentially a cottage industry in the 1970s
to a $30 billion equipment industry by 2000.
||Investors received excellent
returns. Over the last two decades,
there have been many IPOs and M&As that have provided handsome
returns to investors.
Yet today, venture investors are reluctant to put money
into semiconductor equipment start-ups. Why?
note 9/11 and geopolitical
uncertainty. These VCs are looking not for the reason to invest, but for
the reason not to.
There are also VCs who are worried
about the current semiconductor industry downturn, fearing we are in a
bottomless pit. They are so worried and fearful about the risk and
potential loss of their investments that they would prefer to opt out of
even the most attractive opportunities. These VCs would be more
comfortable doing start-up investment after most
economists have pronounced and government
statistics confirmed our nation’s economic recovery. But by then, they
may be “buying high” and missing the greatest opportunity for return.
Finally, there are VCs who justify
their reluctance to invest by noting their maturing of the semiconductor
industry, as if all innovations worthy of discovery have already been
discovered. The industry is indeed getting more mature
than, say, when I started Lam Research in 1980; most equipment
manufacturing sectors are now dominated by a few large companies and fab
managers are becoming more conservative as they seek to manage and
optimize their supply chains.
However, as long as our industry