Dan Feinberg, Technical Editor, from iConnect007 discusses with Dr. Subodh Kulkarni, President and CEO, CyberOptics, MRS Technology, the merging of semiconductor and SMT industries, and new application opportunities on location at APEX in San Diego, California.
DF: Hi, this is Dan Feinberg at RealTime at IPC. I have with us Dr. Subodh Kulkarni. He’s President and CEO of CyberOptics Corporation. We had a little bit of a talk before hand, and you’re doing some really interesting things. Tell us about your company and what your main products are.
SK: CyberOptics is fundamentally a sensor technology company. We make different kinds of sensing technologies that are relevant for semiconductor and SMT markets. Our focus right now is on two different sensing technologies relevant for these markets. One is called MRS™, which stands for Multi-Reflection Suppression™. It’s a 3D non-contact optical sensing technology, relevant for SMT and semiconductor markets, and that’s what we are showing at this show. The other technology which we are not showing here, that’s more for the semiconductor front-end side, is what we call WaferSense® technology – a wireless measurement sensor portfolio for set-up and diagnostics of semiconductor tools. Once again, we are a sensor technology company in the SMT and semiconductor market, making sensors and inspection systems.
DF: So your main market is the SMT market?
SK: And semiconductor market.
DF: So two markets
SK: That’s the exciting part. What’s happening is there’s a convergence of the SMT and semiconductor markets going on right now. We are very fortunate to be playing in that converging space. Semiconductors started stacking dies on top of each other because they were having a tough time shrinking the transistor in the second dimension all the time. So they started taking advantage of the vertical, third dimension, and between stacking, embedding dies, fan in, fan out. The advanced packages are kind of playing in the SMT market right now. A good example is your latest iPhone®. If you open the latest iPhone, you don’t see a conventional PCB in it anymore. All you see is a bunch of modular advanced packages that are strung together, and that’s the direction where SMT and semiconductors are converging. And that’s exactly the market we play in with our advanced sensing technologies and systems.
DF: Is that kind of like the AMD chiplet?
SK: A little bit. Chiplet is one way to play in that same advanced packaging area. There are many things happening on that front that is driving the growth in advanced packaging. But it’s well understood by both the SMT market, as well as the semiconductor market, that this converging advanced packaging space is an exciting area to be in. In the next decade, that is where a lot of the innovations are going to happen. That’s where a lot of the new developments are going to happen, and that’s exactly the place we are playing in.
DF: So that’s what you’re calling the MRS technology?
SK: Yes. MRS stands for Multi-Reflection Suppression. It’s a unique way of doing 3D non-contact optical sensing technology. That enables us to get higher accuracy and higher speed, than conventional optical technologies. But it is really important in the advanced packaging space to have those kinds of technologies.
DF: You also had mentioned the WaferSense technology.
SK: Yes. WaferSense is a semiconductor front-end technology where we are taking a sensor, a battery and a Bluetooth element and putting it in a tight form factor, like a wafer. The wafer shape comes from a silicon wafer. We are using it as a diagnostic tool in the semiconductor front-end to see what may be going wrong, to help improve yield and productivity in the fab.
DF: It is a very interesting time. We have so much upcoming technology. Things like 3D printing of circuits, 3D additive manufacturing of circuits is something that has been talked about for the last 5 or 6 years. Now it looks like it is starting to happen. I saw some announcements this week by some of the manufacturers of the equipment, and they are showing their sales are climbing almost exponentially. With the upcoming technologies, there are some challenges, but there good be some advantages. How do you see some of these things?
SK: Well clearly, there is a reason why these upcoming technologies are gaining traction. There are tremendous advantages with additive manufacturing and that is why it is gaining a lot of traction. Frankly, from our standpoint, the challenges that these new technologies bring, are opportunities for us. Inspection by definition is needed when you have complex parts, complex processes, where yields and productivities need to be improved. If everything is simple, you really don’t need inspection, just run the process. So the more advanced, the more sophisticated these new technologies are, they create opportunities for us. These are challenges, obviously. We need to keep coming up with inspection technologies that are ahead of what the needs are. That’s where this advanced packaging area, a lot of the MRS advancements we’ve done in the last few years, we feel very well positioned to take advantage of the challenges that are in advanced packaging areas or additive manufacturing areas are going to be bringing in the next few years.
DF: It sounds like you’re pretty much focused on the high-end of the market
SK: That is absolutely correct. We are a relatively smaller market share player in the inspection area, however if you look at the kinds of customers we have, we are more fortune 500 customers than the large EMS’s. Typically, most of our customers choose us because of our technology and frankly, they don’t mind paying a little higher price for the quality that they are getting. We use the best components, we are using sophisticated technologies, so our accuracies, repeatabilities, resolutions are typically better than many low-end SPI or AOI manufacturers you find on the show floor. It does create a challenge for us; we unfortunately cannot play in the mass market in China where prices are drivers. But that’s ok. We have tried to steer to the high-end where quality matters, so effectively we are the Mercedes or BMW in the auto industry, if you will.
DF: If you’re making and selling BMW’s, Mercedes or like cars. I mean Hyundai, Toyota, Chevy and so forth, they make good cars too.
SK: Absolutely they do.
DF: And you have to compete with them. Their prices are obviously lower, so it’s a challenge for you.
SK: A challenge, but at the same time, there is a reason. I’m a Mercedes driver myself and I chose Mercedes over Toyota because there is something fun in driving a Mercedes, and there is some value you are getting. And that’s exactly the way the inspection industry is too. The higher-end products like ours, people choose us for the resolution, accuracy, repeatability, and yes, it is a challenge to convince those users why a higher price is essential. But once they use it, test it, they fall in love with it, and that’s exactly the way it goes.
DF: One thing you have announced recently, maybe it was just in the last few days, a new partnership on micro LED? Tell us about that if you can.
SK: Micro LED is an exciting new technology that is just coming on the horizon. Essentially it has the best of both LCD and OLED technologies, so its got high light intensity but consumes less power. So clearly the belief in the display industry is that 5 years or 10 years from now, micro LED is going to take a big chunk of the current LCD or OLED technology. And many large companies have already invested billions of dollars, Apple is the biggest one, who has invested more than 5 billion dollars in micro LED. Samsung and others have invested too. One of the challenges in the micro LED industry has always been the cost involved in making micro LED displays. We have partnered with a company called Rohinni, out of Idaho. And they have a very novel way of using SMT processes to make micro LED displays that brings the cost down, and those applications are just taking off. So by the end of this year, Rohinni is going to enable some very interesting commercial applications with micro LED that we will be seeing in some consumer products. So we are a part of that equation. We have enabled our inspection technology and systems to do the kind of active monitoring of measurements of their various parts and processes. And we are doing active feedback loops. So those are the kinds of technologies that do need high-end MRS Technology, and they are willing to pay prices for it. We are pretty excited about being a part of the micro LED ecosystem, and taking advantage of that area.
DF: I would guess. So they’re in Idaho? That’s interesting. Are they relatively new in Idaho?
SK: They have an interesting history. If you go to Rohinni’s website, you will see a lot of information about them. Their biggest sponsor is Tony Fadell. Tony is the creator of the iPod. He was an executive at Apple, then he left and started Nest – then sold Nest to Google. So he’s the funding source for Rohinni, and it’s a very interesting technology company that has done a phenomenal job of taking the technology to commercialization.
DF: The reason I asked about that was mainly because this is the second company that I’m aware of that’s in Idaho that moved some of their major manufacturing to Idaho recently from California. When it’s one, it’s interesting. When it’s two, it’s a trend.
SK: Well, I think this part of Idaho is just across the border from eastern Washington. So they do get the advantage of Washington state, Seattle and all the educated workforce and everything. So you’re not quite in rural Idaho at that point, you’re still in a very urban kind of an area.
DF: I think it’s been one of the only states I’ve been in, once in my life.
SK: It’s a beautiful state.
DF: It is, it really is. So here we are in the beginning of the third generation of the millennium. How were your sales this year?
SK: In the inspection systems business, we are doing really well. Our sales grew solid double digits last year. The market was relatively flat, and many of our publicly traded competitors have been reporting declines in inspection systems. We grew double digits, so we clearly are getting share in this market. This year, the overall expectation is that the market is going to improve compared to last year. Clearly the semiconductor industry, that puts out almost weekly reports, is saying there’s going to be a 5-6% growth and the SMT industry usually follows suit. So we are all expecting the overall market to grow, and we will obviously continue to gain share. That’s our plan. We are expecting our growth to be faster than the market growth. We feel pretty good about the next 3-5 years, barring any significant globalization, that we should continue our growth here.
DF: I’m hearing that from so many. I’m seeing so much optimism about the economy in general. In my more than half century in the industry, I’ve not seen…
SK: Well, I think what we are definitely seeing is the impact of a lot of manufacturers are indeed moving out of China. Not everything is coming back to the USA or Europe, but some part is. But even that some part does drive a lot of manufacturing.
DF: It’s going to Vietnam, India, it’s going to Mexico. Some is coming back here.
SK: If you look at manufacturing in the US or the western world, it is increasing. And I think a lot of our optimism is based on that front.
DF: Based on that, what’s the projection for the coming year?
SK: Definitely, we plan to grow this year. We are a publically traded company, so I would be careful about giving forward guidance’s. What we have signaled to our investors is, over the next 3-5 years we are definitely expecting to roughly double the size of the company. So planning to grow double digits in the next 3-5 years here.
DF: Very good. Well, I wish you well. And perhaps we’ll have a chance to talk again next year, and you can tell me that you made that projection. Because you know, I’ll ask you about it. Thank you so much for joining us.
SK: Absolutely, thank you.