The global semiconductor equipment industry is intensely competitive and is characterized
by rapid technological change and demanding customer service requirements. Our
ability to compete depends upon our ability to continually improve products, processes
and services, and our ability to develop new products that meet constantly evolving
customer requirements.
Substantial capital investments are required by semiconductor manufacturers
to install and integrate new processing equipment into a semiconductor production
line. As a result, once a semiconductor manufacturer has selected a particular
supplier's products, the manufacturer often relies upon that equipment for the
specific production line application, and frequently will attempt to consolidate
its other capital equipment requirements with the same supplier. Accordingly,
it is difficult for a competitor to sell to a customer for a significant period
of time in the event a customer has selected our product. It also may be difficult
for us to replace an existing relationship that a potential customer has with
a competitor.
Each of our product lines competes in markets defined by the particular IC
fabrication process it performs. In each of these markets, we have multiple
competitors. At present, however, no single competitor competes with us in all
of the process areas in which we serve. Competitors in a given technology tend
to have different degrees of market presence in the various regional geographic
markets. Competition is based on many factors, primarily technological innovation;
productivity; total cost of ownership of the systems, including yield, price,
product performance and throughput capability; quality; contamination control;
reliability and customer support. We believe that our competitive position in
each of our markets is based on the ability of our products and services to
address customer requirements related to these competitive factors.
Our principal competitors in the dry strip market include Lam Research Corporation
and PSK, Inc. Principal competitors for our thermal annealing systems are Applied
Materials, Inc., Dainippon Screen Manufacturing Company and Ultratech, Inc.
Principal competitors for our etch systems include Applied Materials, Inc.,
Lam Research Corporation and Tokyo Electron Limited.