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20 November 2006


Aviza achieves operating profit one quarter ahead of forecast

For its fiscal 2006 (to end-September), process equipment supplier Aviza Technology Inc of Scotts Valley, CA, USA has reported net sales down 6% from fiscal 2005's $171.2m to $160.9m. However, net loss was cut from $16m to $14.7m.

Also, for its fiscal fourth-quarter 2006, revenues were $52m (up 19% on the prior quarter and 60% on a year ago), partly due to conversion of the Celsior next-generation single-wafer atomic layer deposition (ALD) system from 'new' to 'proven' technology.

Compared to an operating loss the prior quarter of $2.6m, Aviza has also achieved operating profitability (one quarter earlier than forecast) of $752,000, despite stock-based compensation expense of $383,000. Net loss was cut from $4m the prior quarter to $779,000. Gross margin rose from 24.6% to 33.1%. However, cash reserves have shrunk from $17.9m to $10.7m, mainly due to repayments under Aviza's revolving line of credit and its decision to increase inventory in response to customer forecasts.

During the quarter, Aviza received a follow-on, multiple-system order for Celsior from Inotera Memories Inc. This follows the production release of a Celsior system at Inotera's Fab 1 earlier in 2006. Inotera also ordered
multiple RVP-300plus thermal processing systems, for installation as part of Inotera's Fab 2 capacity expansion. Aviza also shipped multiple RVP-300plus systems as part of a follow-on order from one of Singapore's leading 300mm

For its fiscal first-quarter 2007, Aviza expects revenues of $55-60m and an operating profit, based on the anticipated customer acceptances of certain etch modules and conversion of a new etch module from 'new' to 'proven'
technology. Stock-based compensation expense should be $350,000-400,000, depending on the timing, number and size of new stock option grants and cancellations.

For full-year fiscal 2007 (to end-September), Aviza expects revenues of $220-240m and net income of 2% of revenues, based on the anticipation of continued strength in the DRAM market and the company's currently anticipated product mix for fiscal 2007.

See related item.