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4 April 2008


Aviza cuts guidance and restructures

On 31 January, deposition and etch equipment maker Aviza Technology Inc of Scotts Valley, CA, USA said that, for its fiscal second-quarter 2008 (ended 28 March), it expected net sales of $30-35m (down on $60.6m a year ago) and an operating loss of $7-8m (compared to net income of $1.4 m). However, the firm says that it now expects results to be towards the low end of this guidance (excluding any restructuring charges).

For its fiscal third-quarter 2008 (ending 27 June), Aviza expects net sales of more than $36m (rebounding slightly compared to fiscal Q1/2008’s $34m). An update will be provided when announcing fiscal Q2/2008 results (tentatively expected in early May).

Also, on 28 March, Aviza received a letter from Nasdaq notifying it that the bid price of its common stock had closed below the minimum $1 per share requirement for continued listing. Aviza has been given 180 days (until 24 September) to regain compliance (through the bid price closing at $1 per share or above for a minimum of 10 consecutive business days).

Aviza cutting DRAM programs and staffing; reduces forecast

Following an analysis of its product strategy, served markets and internal operations, Aviza plans a significant restructuring of its workforce, products and business operations, with the aim of reducing its cost structure and improving its operational execution and financial performance.

Aviza is refocusing on its core strengths in atomic layer deposition (ALD) technology for the sub-45nm nodes, and etch and PVD technologies for the fast-growing 3D-IC market segments, in which the firm believes it has competitive advantages (as demonstrated by recent wins for ALD in Japan, etch for MEMS devices and PVD for power ICs).

Aviza says it will downsize programs, products and spending related to trench capacitor technology for DRAMs, and decrease its overall dependence on the DRAM market. In addition to shedding assets that are not core to its future business plan, the firm will cease development of large batch thermal systems for the trench capacitor market. However, Aviza says it will continue to service and support its large global installed base of these products and retain the capability to manufacture the systems when customers require additional units.

“This restructuring effort is designed to allow Aviza to focus on our core market strengths, shed some underperforming products, and ultimately position the company for growth,” says president and CEO Jerry Cutini. “We have taken multiple actions to properly scale our company, including a recent reduction in workforce, divesting of certain operations such as our machine shop in the UK, and focusing our spending on markets and products that have a clear path for sustainable growth. In doing so, we expect that Aviza will be better positioned to become profitable on an ongoing basis,” he adds. “We feel confident that the measures we are taking will enable Aviza to lower its financial break-even point and improve our financial performance.”

The cost of the restructuring program and other one-time charges is estimated to be $20-24m, due mainly to the write-down of assets relating to non-core products which include inventory revaluation, cancellation of purchase commitments, and fixed assets. It also includes costs relating to a reduction in the number of staff and contractors by about 15%. Aviza expects additional savings to occur when it relocates its headquarters from Scotts Valley to a more appropriately sized facility in Santa Clara County, CA. Volume manufacturing will no longer be performed at Aviza's current location. The restructuring should result in annualized savings of $16-20m.

Aviza makes follow-on shipment of etch systems to Anadigics

Aviza says that, in its in fiscal first and second quarters of 2008 (ended 28 March), it made a follow-on shipment of multiple Omega etch systems to GaAs RFIC maker Anadigics Inc of Warren, NJ, USA, which is an established customer of Aviza’s etch and physical vapor deposition (PVD) system. The latest etch systems can be used to etch silicon nitride, GaAs backside vias and BCB/silicon oxide.

“We selected Aviza because they proved that their Omega fxP and Omega i2L systems could clearly meet our process requirements and we know Aviza can deliver excellent customer support and service,” says Anadigics’ supply chain director Iain Black. “As an incumbent process equipment supplier to Anadigics, we are sensitive to their manufacturing requirements,” said Kevin Crofton, VP and general manager of Aviza’s PVD/CVD/Etch business unit. “Our existing Omega i2L and Sigma fxP systems previously installed at Anadigics’ facility proved the manufacturing worthiness of our products,” he adds. “We are grateful that Anadigics has turned to Aviza to both help meet their rapidly expanding etch capacity needs, and at the same time, address the challenging process performance and productivity requirements for their next-generation products.”

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