Industry News, Trends and Technology, and Standards Updates

by Bob Reback,
President and CEO

Running a company during an industry downturn presents quite a challenge. I have always thought I would someday be the president of a company. However, during this severe semiconductor down cycle, the thought that you should “be careful what you wish for” certainly came to mind a few times. Even though Cimetrix is a small company, successfully navigating a business through a severe downturn that hit the semiconductor industry requires a combination of critical thinking, tough decisions and a durable stomach.

The decision making process must consider the perspectives of all stakeholders - including investors, customers, employees and suppliers. The primary objective is clearly to make sure the business survives through the downturn. The secondary objectives relate to how to best satisfy customers, investors, employees and suppliers while making sure objective number one is met.

More than ever, this requires extensive communication with all parties. Not every party will be happy with your decisions. However, having sound analysis for your decisions, along with open and honest communications can ensure that all parties understand and, most importantly, accept the decisions.

Like almost all companies that serve the semiconductor industry, Cimetrix’s revenues suffered severe declines in the first half of 2009. The dramatic decline in revenues was the root cause of the crisis, as revenue brings in the necessary cash flow to pay employees and other business obligations. In addition, the severity of this down cycle caused more customers than anticipated to cease operations as a result of either bankruptcy or a parent company shutting down a division. Even though our primary competitor filed for bankruptcy and ultimately sold off its assets, there is no joy as you empathize for all of the affected employees without a job.

Fortunately, Cimetrix has a great team and everyone pitched in to help ensure the company successfully navigated through this down cycle. This includes our customers, employees, suppliers and investors. We are now seeing evidence that our customer’s businesses are starting to improve and the industry is on the mend, which is leading to increased revenues for Cimetrix. By retaining all of our key customers and a solid team of employees, we are well prepared and positioned for growing the business going forward.

by Dave Faulkner
Executive Vice President, Sales & Marketing

It is starting to feel like a recovery in the semiconductor industry.  Wall Street is saying to keep on eye on semiconductor stocks and even semiconductor equipment stocks.  SEMI just reported that worldwide semiconductor equipment bookings for Q2 2009 were 83% greater than Q1 2009.  Capacity utilization is likely to reach 88% in Q3 2009 according to IC Insights, up from 57% in Q1 2009.   And the SEMI World Fab Forecast is now calling for a 64% increase in fab spending in 2010.  The fear is starting to subside.   Q1/Q2 2009 appear to be the low point for equipment suppliers and we appear to be heading up the hill, but starting from a very low elevation.  I think we are finally in the recovery.

We have a very unique look at the semiconductor industry.  Our customers report tool shipments based on license orders.  And our customer base is very broad including all tool types in the frontend and backend.  We see who is booming and who is busting.  While we would never, never, never discuss individual company progress, I can say that shipments (via way of license revenues) have hit their bottom and are on the way back up.  And we are seeing this in all areas of the semiconductor industry.  It is like seeing a bit of blue sky during the storm, it gives us hope for all.  We just need to give the rest of the storm clouds time to move on…..