One Vancouver semiconductor firm operates in the region known for the industry’s big players
Is it Microsoft that makes the Seattle area a high-tech hub, or is it the many smaller, lesser-known firms that cluster around it? The same could be asked about the semiconductor industry in the Vancouver/Portland market. Vancouver’s Isonics Corp. operates in the shadows of SEH America and WaferTech, and they are why it is here in the first place. But Isonics plays a key role in the industry as well.
Vancouver is home to the semiconductor division of Golden, Colorado-based Isonics Corp. Isonics’ Vancouver facility offers test wafers, wafer reclaim services and silicon-on-insulator wafers for the semiconductor industry.
Isonics acquired its 35,000-square-foot Orchard’s facility in June 2004 to bring its SOI manufacturing in house. The operation has existed in Vancouver since 1997 when a California-based company established Silicon 2000 here. The operation later changed its name to TTI Silicon and was purchased by EnCompass Materials Group in 2002. In 2004, Isonics purchased the facility from EMG.
Like the semiconductor industry, the operation has seen its ups and downs. Isonics has yet to turn a profit with its semiconductor division, but revenues are growing significantly.
Isonics acquired SOI technology in 2002 and had outsourced manufacturing initially. The layered construction of an SOI-based microchip is higher performing and uses less energy than traditional silicon wafers, making them ideal for battery-powered mobile devices, such as cell phones. Acquiring the Vancouver facility allowed Isonics to combine its SOI business with the operation’s test and reclaim capabilities.
Test wafers are a lower-cost option to the highest quality "prime" wafers and are used in the semiconductor industry to test processes and equipment. Reclaimed wafers are essentially recycled. New wafers that do not meet prime specifications or used wafers are cleaned and polished to meet standards. A test wafer costs about 75 percent of a prime wafer and a reclaim wafer is only about 30 percent of the cost of a new prime wafer.
Isonics also offers thinning services and can grind a wafer so thin it flops like a piece of paper.
The company’s customers include semiconductor manufacturers, semiconductor equipment vendors and integrated circuit manufacturers.
Isonics has further diversified in an effort to reach profitability. In May 2005, the company brought on Joanna Lohkamp from Intel as chief operating officer to turn the company around. At the same time, the company began offering a 300-millimeter silicon wafer product line.
"You have to have some sort of diversified portfolio so you can weather the business cycles in the semiconductor industry," said Lohkamp.
The 300-millimeter, or 12-inch, wafer format is the fastest growing segment of the industry.
"We knew we couldn’t be profitable if we were not running the latest technology," she said.
When Isonics bought the facility, it was only capable of running 4-, 6-, and 8-inch wafers.
Since 300-millimeter wafers are the latest technology, they have the highest profit margin. Isonics has invested more than $3 million since acquiring the facility for $2.9 million to increase capacity for 300-millimeter production, said Lohkamp. With its main competitors overseas, Lohkamp said Isonics is the largest 300-millimeter reclaim company in the United States.
Right now the industry is in a constraint mode, she said, because there is not enough silicon to go around. The growth of the solar industry has limited the supply of silicon and increased costs. As a result, semiconductor users are seeking additional sources, such as Isonics, for its reclaim services.
In the fiscal year 2006, ended in April, the company posted revenue of $5.7 million, up from $2.7 million a year earlier. Operating loss has decreased quarter over quarter. The company attributes the sector’s improvement to the shift to the higher-margin 300-millimeter products and services.
But for the company to succeed, it has to focus on more than the latest technology.
"As we have moved to the latest technology, it has been more than a manufacturing change," said Lohkamp. "It’s been a customer change, and it’s been a change for our employees."
Transitioning to 300-millimeter production brought new demands on employees and attracted a different tier of customers. Lohkamp said Isonics is working to improve its operational efficiencies, productivity and yield.
A year ago, the company’s manufacturing yield was 55 percent. For every 100 units processed, only 55 met quality standards. In the last three months, yield has consistently been more than 80 percent. The result is a more salable product and more capacity without adding more equipment.
"It has been one of the keys to our success," said Lohkamp.
The company is continuing to increase capacity to meet demand. It recently doubled capacity by adding a tool where there had been a production bottleneck.
Isonics has 54 employees at its Vancouver facility and expects to add four employees in the next year, said Lohkamp.
"I think we are on a great growth trajectory, and we still have so much room for improvement," she said.
And the company is in the right place to grow. Being located in a city and county focused on expanding and attracting business and resources such as the Columbia River Economic Development Council and the Clark County High Tech Council make a difference, said Lohkamp.
"I think the potential for this region is phenomenal because of those resources," she said.
Being near large players in the semiconductor industry and the businesses that support them is also an asset.
"We get great service because of being in an area that is so semiconductor intensive," said Lohkamp. "If Isonics were located somewhere else, we would clearly not be as successful."
