News Article

Tegal Posts First Profit Since 2000

CEO Tom Mika's restructuring efforts bear fruit as the plasma deposition and etch equipment supplier moves into the black for the first time in seven years.

Wafer fabrication equipment vendor Tegal posted a net profit of $0.7 million on sales of $10.8 million in the financial quarter that ended on September 30.

Though small, the positive return is significant because it represents the Californian firm s first profitable quarter since the final quarter of 2000, vindicating the measures taken by CEO Tom Mika over the past few years.

Said Mika: "We have made substantial progress in the strategic re-engineering of our business, improving our overall cost structure and delivering sales growth."

The sales figures have certainly improved over the past year, more than doubling since the equivalent period in 2006.

Tegal s existing product line is now focused on four key application areas: high-k dielectrics, such as hafnium compounds; "noble" metals; piezoelectric materials, like AlN; and compound semiconductors.

"The compound semiconductor market is one to which we are firmly committed," Mika told investors in a conference call to discuss the latest financial results.

"We are striving to offer new, cost-effective processes and system solutions."

With a recent follow-on order from GaAs giant Skyworks Solutions on its books, Tegal appears to be making good progress in the compounds arena.

Regarding new products, Mika reported progress in the development of a nanolayer deposition (NLD) tool for producing thin films of TiN, although he made no firm announcement about a commercial launch date.

With an order backlog of $10.3 million, Mika added that he was looking forward to what remains of 2007 and hopeful of similarly good financial performance in the closing quarter.

Tegal will also be looking to make closer ties with university research groups. Although Mika admitted that such sales are typically less lucrative than industrial deployments, he believes that these collaborations will help Tegal with its product development.

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