ASM International is a global supplier of wafer processing equipment, primarily for semiconductor manufacturing. ASM's innovative technologies are being used by the most advanced semiconductor manufacturers, primarily for the deposition of thin films. We design, manufacture and sell equipment and services to our customers for the production of semiconductor devices, or integrated circuits ('IC’s'). Semiconductor IC’s, often called chips, are a key technology enabling the advanced electronic products used by consumers and businesses everywhere.
Global demand for semiconductors is exploding as chips enable technological advances for an expanding number of applications. The cloud, smart vehicles, the desire to be fully connected at all times for email, phone and the internet. All these factors and more are driving the demand for smaller, faster, cheaper chips. The semiconductor industry is committed to reducing the size of transistors so that more of them fit in the same physical space. For over 30 years now, following the trend called Moore’s Law, the average number of components per integrated semiconductor device, at the optimum cost-per-component, has been increased by a factor of two every 18 to 24 months. Currently, the most advanced microprocessor chips include over 2 billion transistors. ASM’s technology is an enabler of the deposition of the extremely thin semiconductor material layers that create these advanced chips. A driver of innovation, ASM has established a leading position in the fast growing markets for ALD and PEALD equipment, and also provides equipment for PECVD, epitaxy, and vertical furnace applications.
Semiconductor manufacturing background
The process of making semiconductor IC’s is highly complex and very costly. Semiconductor fabrication plants, called fabs, house a large set of wafer processing equipment which performs a series of process steps on round silicon wafers, which are typically 300mm in diameter. The equipment is operated in cleanrooms that filter the air to avoid small particles that could negatively affect the circuitry on the chips. There are many chips on each wafer. Most of ASM’s systems are designed for deposition processes when thin films, or layers, of various materials are grown or deposited onto the wafer. These films are electrically conductive metals, insulating dielectrics, or semiconducting to allow precision control of electrical signals. By depositing multiple layers of films, multi-level, integrated electrical circuits are created on each chip. After testing the individual circuits for correct performance, the chips on the wafer are separated and then packaged in protective coatings before ultimately becoming part of a set of IC chips on circuit boards within an electronic product.
Industry scale and major trends
Semiconductor devices are the key enablers of the electronic age. Each semiconductor device can hold many components, most of which are transistors and means to store a charge in the case of memory chips. Logic chips are used for making calculations or more generally for executing the instructions of the software that controls an electronic product. Memory chips are used to store the digital 1’s and 0’s that make up the programs and data. Various ASM equipment is used in the fabrication of both logic and memory chips, as well as other general integrated devices. A recent trend is the combination of logic and memory on the same chip to create a system on a chip ('SOC'), which can increase the speed of the electronics, and reduce the total size and cost of the packaged product.
The semiconductor industry was driven in 2014 by a US$2.02 trillion global electronics industry (VLSI Research
Chip Insider January 19, 2015), that required approximately US$289 billion in semiconductors. The semiconductor industry in turn, supported the approximately US$50.2 billion semiconductor capital equipment industry, which supplies the needed production systems and services. Within the capital equipment segment, ASM serves the wafer processing equipment segment which is approximately US$32 billion. Demand for semiconductor capital equipment is driven both by growth in the market for semiconductor devices and also by new technology needed to realize the next generation of devices. The semiconductor industry rose about 10% in 2014, driving the equipment business up by about 17%. Equipment growth in 2014 was driven mostly by capacity expansion in memory fabs and new technology generation investments in logic and foundry fabs.
New technology generations are driven from the industry’s relentless push to follow Moore’s Law, which ultimately enables devices with more performance at a lower cost. One result of this advanced technology drive is higher complexity in transistors and memory devices. Historically, new technology nodes have been achieved by shrinking the transistor size, however certain physical limits have recently been reached. To solve this problem the trend is to build 3D transistors because more functions can be stacked vertically than in two dimensions. So-called 'FinFET’s' and several 3D memory architectures are now in volume production.
Another 3D trend in semiconductor manufacturing is the stacking of several chips in one package. These chips can come from different supply chains, each optimized for its own performance and cost, enabling the manufacture of heterogeneous devices with integration in the package or as chips stacked on a wafer. In this way 'more than Moore' chips can be efficiently integrated with conventional 'Moore' scaled devices in one package.
The trends outlined above are the main drivers of the broad semiconductor roadmap which semiconductor equipment companies track in developing new production systems and process technologies. These new systems and technologies must be developed well ahead of volume demand for the semiconductor devices they make. As a result, there is a large lead time between the investment in a new technology, and its commercial success. With the combination of a long lead time and the short product life-cycles comes the inherent difficulty of matching supply and demand, which results in the high volatility associated with the semiconductor equipment industry.
Our strategic objective is to realize profitable, sustainable growth by capitalizing on our innovative strength, operational excellence and our leadership in ALD and other business segments we are active in. The key elements of our strategy include:
Innovative strength, ASM has always been recognized for its technology leadership. Today, we provide leading technologies that support our customers in staying on the curve of Moore’s Law. Our innovative strength is what differentiates us in the marketplace and continues to be the cornerstone of our strategy. Apart from our internal R&D efforts we are continuously expanding and deepening our strategic cooperation with key customers, suppliers, chemicals manufacturers and research institutes such as imec. We also expand our patent portfolio where it is necessary and beneficial.
Leadership in ALD, ALD and PEALD technologies have been established as mainstream technologies in high volume manufacturing supporting virtually all of the leading customers in the semiconductor industry. As a leader in this space, ALD and PEALD have turned into a key growth driver for our business. We expect that the trends of continued scaling and evolution towards 3D device structures will further expand the number of applications for ALD. We aim to maintain our leading position in ALD, by leveraging on our strong expertise and established customer relationships, and by developing new applications to support our customers with increasingly complex device node transitions.
Operational excellence, While technology leadership remains crucial we continue to focus on further improving the effectiveness of our organization and the efficiency of processes. We aim to provide our customers with dependable leading-edge products and services at a consistent quality and the best cost of ownership. To this end, we continue to optimize our manufacturing and global sourcing processes, including the migration to common product platforms.
ASM business structure
ASMI is generally organized with a set of business units that develop and market our products, and globalized operation and administration groups that support the business units and our customers. ASMI’s operations are conducted through wholly-owned subsidiaries, the most significant being ASM Front-end Manufacturing Singapore Pte Ltd ('FEMS'), located in Singapore, ASM Europe BV ('ASM Europe'), located in the Netherlands, ASM America, Inc ('ASM America'), located in the United States, ASM Japan KK ('ASM Japan'), located in Japan, and ASM Genitech Korea Ltd ('ASM Genitech') located in South Korea. The location of our facilities allows us to interact closely with customers in the world’s major geographic market segments: Europe, North America, and Asia.
Semiconductor device manufacturing processes
The manufacturing process of semiconductor devices on a wafer can be divided in three distinct parts: wafer manufacturing, transistor formation (known as Front-end of the line ('FEOL') processing), and interconnect formation (known as Back-end of the line ('BEOL') processing). We develop, manufacture and sell equipment, and provide services used by semiconductor device manufacturers in each of these sections of semiconductor device manufacturing.
In the wafer manufacturing process, a large single crystal of very pure silicon is grown from molten silicon. The crystal is then sliced into a large number of thin slices, or wafers, of single crystalline silicon. These slices are polished to an atomic level flatness before the next steps are executed. For advanced applications, some layers are deposited on the wafer for later use, by either epitaxy or diffusion/oxidation. Epitaxial wafers are even flatter and contain fewer defects at the surface than polished wafers.
During FEOL and BEOL wafer processing, multiple thin films of either electrically insulating material, also called dielectrics, or conductive material are modified, grown, or deposited on a silicon wafer. First, several material processing cycles are used in the FEOL to build the basic transistor and other components such as capacitors and resistors. Second, several processing cycles are used in the BEOL to electrically connect the large amount of transistors and components, and to build additional passive components such as capacitors, inductors and resistors. Patterning of deposited layers with lithography and etching creates the transistors, passive components and connecting wires, which together make up the integrated circuit. Each integrated circuit is a single 'chip' or a 'die' on the wafer. A finished wafer may contain several dozen to several thousand individual dies. Wafer processing is performed either one wafer at a time in single wafer processing systems or many wafers at a time in batch processing systems. Multiple deposition, and patterning processes are performed on the same wafer to complete a device.
The number and precise order of the process steps varies depending upon the complexity and design of the integrated circuit. The performance of the circuit is determined in part by the various electrical characteristics of the materials used in the layers of the circuit and the wafer. Simple circuits may have as few as ten layers, while complex circuits may have more than one hundred layers. The device manufacturing process is capital intensive, requiring multiple units of several different production systems. Many different but complementary methods are used to modify, grow, or deposit materials on the wafers. The device manufacturing process on the wafer is complete when all of the layers have been deposited and patterned on the wafer.
The introduction of even trace levels of foreign particles or material can make a circuit, or even an entire wafer, unusable. To reduce the level of foreign particles or material, wafer processing is performed in clean rooms with ultra-low particle and contamination levels. The correct electrical functioning of the integrated circuits on each die is confirmed by probing. Non-functioning circuits are marked so they can later be discarded before money is spent on packaging the chip. The yield, or the percentage of known good die for a mature process is usually well above 95%. For a process in development the yield can be substantially smaller, and it is important to improve this as quickly as possible as it determines the profitability of our customers to a large extent.
Important technology trends for our business
The continuous demand for smaller, faster and cheaper semiconductor components drives the technology advances in the semiconductor manufacturing process. As the transistors in an integrated circuit become smaller, the cost-per-component decreases. Fortuitously, at the same time the operating speed of the transistor increases. Thus the minimum size of a single transistor in an integrated circuit is an extremely important parameter. Today, our customers manufacture semiconductor devices as small as 14 nanometers ('nm') (one nanometer is one billionth of a meter), sometimes in a vertical 3D transistor or FinFET architecture. Our customers are qualifying and testing new critical processes to generate devices with line widths at or below 10nm. Simultaneously, in our customers’ laboratories and several collaborative research environments advanced 7nm to 5nm design rule devices and related materials are being developed.
In developing faster and smaller devices, our customers’ major technology requirements are:
- introduction of new thin film materials and device designs needed for continued scaling;
- reliable manufacturing of taller and smaller three-dimensional structures in devices;
- lithography of ever smaller feature sizes, now much smaller than the wavelength of visible light; and
- new manufacturing processes that reduce device variability and increase yield.
ASM advanced technology
In order to meet our customers’ needs, we have developed, and are still developing many new materials. Atomic layer deposition ('ALD') is an advanced technology that deposits atomic layers one at a time on wafers. This process is used to create ultra-thin films of exceptional quality and flatness. For example, in the FEOL, ALD of high-k dielectrics and novel metal gate electrodes can improve the performance and reduce the power consumption of a device, thereby enhancing battery life. This same class of materials can also lead to larger charge storage in a smaller capacitor, critical for memories and RF circuits. Whereas in the recent past much focus has been on the development of the high-k dielectric, today as much focus is on new technologies and materials for the metal gate electrode, the gate sidewall passivation and many other applications. Plasma enhanced ALD ('PEALD') is expected to be an important technology going forward for isolating features in 3D devices. We expect that the creation of 3D vertical transistors will further increase the demand for processes with better coverage of 3D structures, such as ALD.
Another example of new materials in the FEOL are our silicon-germanium ('SiGe') and silicon-carbon-phosphorous ('SiCP') epitaxial materials that can increase the switching speed of the transistors and the circuit in which they are embedded by so-called strain engineering. This can be done without negatively affecting the power these transistors consume.
In the BEOL or interconnect process, a continued demand to improve the speed at which signals travel through thin copper wires has led to the development of a full suite of low-k materials. These low-k materials can decrease the amount of delay in signal propagation, resulting in, for example, faster microprocessors. Simultaneously these low-k materials can reduce the amount of power loss in the interconnections. We have been one of the leaders in successfully introducing these low-k materials in the market. We are continuing to develop improvements to this low-k technology to enable faster interconnect circuits.
We have also developed and sold new ALD processes and wafer processing equipment to enable the creation of narrow lines having dimensions beyond the resolution of common lithography, and with low line width variability; a process called spacer-defined double patterning. For that purpose we have developed low temperature Plasma enhanced ALD processes that are compatible with and assist the common lithography process.
In addition to addressing the technology needs of our customers, the relentless drive of the industry to reduce cost corresponds to significant spending on development programs that further increase throughput, equipment reliability, and yield in our customer’s line, and further lower the cost per wafer of the wafer processing systems. In order to enable further efficiencies in our manufacturing process, we have improved, and will continue to improve the level of standardization in our equipment portfolio by migrating to common platforms, sub-assemblies and components. This requires a significant engineering effort, although can provide efficiencies in the long term.
ALD and PEALD at ASM
Atomic layer deposition ('ALD') is one of the newest technologies to deposit ultra-thin films of exceptional flatness and uniformity. This technology was brought into ASMI in 1999 with the acquisition of ASM Microchemistry, who first developed the thermal ALD technology. Plasma enhanced ALD ('PEALD') is an extension of this original ALD technology that uses plasma, which was brought into ASMI in 2001 through a partnership with Genitech and a subsequent acquisition in 2004 and formation of ASM Genitech Korea. The use of plasma enables us to deposit high quality films at very low temperatures. ALD is a very versatile technology that can be used to deposit high-k insulating materials, conductors, silicon oxide and silicon nitride. We expect that the trends of continued scaling, and evolution towards three dimensional device structures play into the strength of our ALD position. We offer ALD/PEALD processes on several of our product platforms, including single wafer and batch systems, and for multiple wafer sizes.
The semiconductor capital equipment market is composed of three major market segments: wafer processing equipment, assembly and packaging equipment, and test equipment. ASMI is active in the wafer processing segment. Within wafer processing equipment the major segments are lithography, CMP, ion implant, deposition, etch & clean and process diagnostics. The principal market segment in which we participate is deposition and related tools. According to VLSI, the deposition segment is approximately US$7.8 billion in 2014.
ASMI’s products come from a number of product platforms, with each platform designed to host and enable specified process technologies. The products in each product platform are linked through common technology elements of the platform, for example a common in-system software framework, common critical components, similar logistics (batch or single wafer processing), or a similar wafer processing environment (wet or dry). The following table lists our principal product platforms, the main process technology that they enable, and the semiconductor device manufacturing solution for which the products from that platform are used.
The Advance is our vertical furnace, batch processing platform. Products built on this product platform are used for diffusion, oxidation, LPCVD and ALD. The product platform is used in many manufacturing steps, from the production of silicon wafers to the final anneal in interconnect.
A412 batch vertical furnace
The A412 is a 300mm vertical furnace system featuring two reactors above a rotating carousel, with a dual-boat configuration for high productivity. The tool supports a wide range of process applications with variable load sizes from 25 wafers for shortest cycle time requirements, up to 150 wafers for lowest cost requirements in a single run.
A400 batch vertical furnace
The A400 system is for 150 and 200mm wafers. It is available with two batch tube reactors and supports applications similar to the A412 tool.
The XP is our high productivity common 300mm single wafer platform that can be configured with up to four process modules. The XP platform enables high volume multi-chamber parallel processing or integration of sequential process steps on one platform.
The XP common platform benefits our customers through reduced operating costs since multiple ASM products use many of the same parts and consumables and a common control architecture improves ease of use.
Pulsar XP ALD system
Pulsar XP is a 300mm ALD tool designed for depositing extremely thin high-k dielectric materials required for advanced transistor gates and other applications. Pulsar is the benchmark ALD high-k gates tool for the industry.
EmerALD XP ALD system
EmerALD XP is a 300mm ALD tool designed for depositing metal gate layers for advanced high-k metal gate transistors and other applications.
Intrepid XP epitaxy system
Intrepid XP is a 300mm epitaxy tool designed for critical transistor strain and channel layers. Processes include silicon ('Si'), silicon-germanium ('SiGe'), and other silicon-based compounds.
The XP8 platform follows the basic architectural standards of the XP, but provides even higher productivity with up to 8 chambers integrated on a single wafer platform with a small footprint.
Eagle XP8 PEALD system
Eagle XP8 is a high productivity 300mm tool for PEALD applications. The system can be configured with up to four dual chamber modules ('DCM'), enabling eight chambers in high volume production within a very compact footprint. The system is capable of a broad range of dielectric PEALD processes including low temperature spacers for multiple patterning applications.
Dragon XP8 PECVD system
Dragon XP8 is a high-productivity 300mm tool for PECVD applications. The system can be configured with up to four dual chamber modules ('DCM'), enabling eight chambers in high volume production within a very compact footprint. Processes include a broad range of dielectric PECVD films for applications such as interconnect dielectrics layers, passivation layers and etch stop layers.
The Epsilon is our platform for single wafer epitaxy. The Epsilon product platform offers a wide range of epitaxy products and materials for many applications, ranging from high temperature silicon used in silicon starting material manufacturing, to low temperature, selective or non-selective silicon, silicon germanium ('SiGe'), silicon-carbon ('SiC') used in CMOS devices and silicon germanium carbon ('SiGeC') used in bipolar devices. The Epsilon 2000 is a single wafer, single reactor system for 150mm and 200mm wafers. The Epsilon 3200 is a single wafer, single reactor system for 300mm wafers.
The Polygon is a single wafer atomic layer deposition platform. It features a six-sided central vacuum handler, capable of hosting up to four reactors. The Polygon 8200 is used for 150 and 200mm wafers, and for magnetic head substrates. The Polygon 8300 is used for 300mm wafers. One or more Pulsar modules with ALD technology can be integrated onto the platform. Products built on this product platform are currently being used in, among others, ALD high-k gate dielectrics for high performance logic, metal-insulator-metal capacitors for system on a chip applications, and magnetic head gap fill.
Intellectual property and trademarks
Because of the rapid technological advances in the microelectronics field, our products must continually change and improve. Accordingly, we believe that our success will depend upon the technical competence and creative ability of our personnel as well as the ownership of and the ability to enforce our intellectual property rights.
We own and license patents that cover some of the key technologies, features and operations of our products and are registered in the principal countries where semiconductor devices or equipment are manufactured or sold. For instance, we have hundreds of issued patents that relate to our ALCVD process technology platform. As another example, we have a significant number of issued patents related to Silcore and other specialized LPCVD and PECVD process chemistries.
The following table shows the number of patents for which we made an initial filing during the indicated year and the number of patents in force at the end of the indicated year. Increased R&D activity in 2012, 2013 and 2014 resulted in a higher filing rate.
|Initial patent filings||33||51||64||61||66|
|Patents in force at year end||931||1,043||1,127||1,159||1,266|
We have entered into worldwide, non-exclusive, non-transferable and non-assignable licenses with Applied Materials for patents related to certain chemicals used to deposit insulating layers for PECVD. A number of the licensed patents have already expired and there are no remaining royalty bearing patents that we use. Upon expiration of the patents, the technology may be used royalty-free by the public, including us.
We have licensed our intellectual property in parts of our ALCVD process technology platform through non-exclusive, restricted field of use license agreements to a limited number of companies. In addition to generating revenue, we seek to accelerate market acceptance of our ALCVD technology through our licensing efforts.
We have licensed our RTP portfolio of 61 issued patents and four pending patents to Levitech BV.
ASM, the ASM International logo, Advance, Aurora, Dragon, Eagle, EmerALD, Epsilon, Intrepid, Polygon, Pulsar and Silcore are our registered trademarks. A400, A412, ALCVD, Atomic Layer CVD, Horizon, Loadstar, Medallion, NCP, PEALD and Previum are our trademarks. 'The Switch Is On' and 'Drive Innovation. Deliver Excellence.' are our service marks.
There has been substantial litigation regarding patent and other intellectual property rights in semiconductor-related industries. Although we have been involved in significant litigation in the past, we are at present not involved in any litigation which we believe is likely to have a material adverse effect on our financial position. In the future, additional litigation may be necessary to enforce patents issued to us, to protect trade secrets or know-how owned by us or to defend ASMI against claimed infringement of the rights of others and to determine the scope and validity of the proprietary rights of others. Any such litigation could result in substantial cost and diversion of effort by us, which could have a material adverse effect on our business, financial condition, and earnings from operations. Adverse determinations in such litigation could result in our loss of proprietary rights, subject us to significant liabilities to third parties, require us to seek licenses from third parties or prevent us from manufacturing or selling our products, any of which could have a material adverse effect on our business, financial condition and earnings from operations.
Research and development
We believe that our future success depends to a large extent upon our ability to develop new products and add improved features to existing products. Accordingly, our global product development policies and local activities are for the most part directed towards expanding and improving present product lines to incorporate technology advances and reduce product cost, while simultaneously developing new products that can penetrate new markets. These activities require the application of physics, chemistry, materials science, chemical engineering, electrical engineering, precision mechanical engineering, software engineering, and system engineering.
We expect to continue investing significant resources in research and development in order to enhance our product offerings. Our research and development activities are chiefly conducted in the principal semiconductor markets of the world, which enables us to draw on innovative and technical capabilities on an international basis. Each geographic center provides expertise for specific products and/or technologies. This approach, combined with the interactions between the individual centers, permits efficient allocation of technical resources and customer interaction during development. In 2010, we formed a global Platform Engineering group that addresses the needs for common platforms for the various products in our wafer processing product portfolio. Selected resources in Leuven, Almere and Helsinki have been grouped under Corporate R&D, addressing the common needs for advanced materials research and process integration work for the 10nm to 5nm nodes.
|Location||Number of R&D employees as of December 31, 2014, exclusive of temporary workers|
|Almere, the Netherlands||36|
|Phoenix, Arizona, United States||161|
|Cheonan, South Korea||46|
As part of our research and development activities, we are engaged in various formal and informal arrangements with customers and institutes. At December 31, 2014, we are engaged in several formal joint development programs with customers for 300mm applications of our products. As part of these efforts, we may sell new products to customers at a significantly reduced margin, and invest significant resources in the joint development and subsequent product qualification. We sometimes also cooperate with other semiconductor capital equipment suppliers in complementary fields, in order to gain knowledge on the performance of our own deposition processes, in cooperation with other processes, either in bilateral or in publicly funded projects. In addition to cooperating with customers and other capital equipment suppliers, we also enter into research projects with technical universities and institutes (for example imec in Belgium).
We participate mainly in Europe in publicly funded programs to research and develop the production technology for semiconductor devices with line widths of 10nm and 7nm and below, and in More-than-Moore technologies. Among our current cooperative efforts are projects awarded under the Information Society Technologies ('IST') seventh framework program and the sequel framework Horizon 2020, and under the Joint Technology Initiative ('JTI') on nano-electronics of the ENIAC Joined Undertaking (European Nano-electronics Initiative Advisory Council JU) and the follow-up program JTI ECSEL (Electronic Components and Systems for European Leadership). Several of these ENIAC and ECSEL projects are Key Enabling Technology ('KET') Pilot Line projects aiming at developing a European pilot line for emerging technologies. We are also involved in several cluster development programs in the Eureka initiative by CATRENE (Cluster for Application and Technology Research in Europe on Nano-Electronics), the successor of MEDEA+ (Micro Electronics Development for European Applications). In the Netherlands we are participating in projects focused on nanotechnology developments ('NanoNextNL') and efficiency improvements for Photovoltaic cells within the TKI Solar Energy Program.
In 2011 we renewed our strategic R&D partnership with the Interuniversity MicroElectronics Center ('imec') in Leuven, Belgium. Our Epsilon, A412, Pulsar, EmerALD, Dragon and Eagle based products are involved in this partnership. In 2012, 2013 and 2014 we significantly expanded our partnership with additional ALD and epitaxy capability. This gives us the opportunity to investigate, both jointly and independently, the integration of individual process steps in process modules and electrically active devices. We have been partnering with imec since 1990.
In December 2003, we commenced a five-year partnership with University of Helsinki that aims at further development of atomic layer deposition processes and chemistries. This partnership was extended for a second and now a third quinquennial, reaching into December 2018.
Per year-end 365 employees were employed in research and development representing 22% of our total staff.
Manufacturing and suppliers
Our manufacturing operations consist of the fabrication and assembly of various critical components, product assembly, quality control and testing.
In 2004, in order to reduce manufacturing costs in our wafer processing equipment operations we established FEMS, a manufacturing facility in Singapore, to manufacture certain generic subsystems and sub-assemblies for our vertical furnaces that we previously outsourced. In 2009 we started the transition of manufacturing of ASMI products to be final assembled in Singapore, i.e. including final assembly, test and shipment of the system to the customer from the FEMS facility. We closed down our manufacturing operations in Almere, the Netherlands, at the end of 2009, and we closed our manufacturing facilities in Phoenix (US) and in Nagaoka (Japan) in 2010.
With this transition we have also implemented a global organization for our procurement activities.
In 2012 we strengthened our organization with a global supply chain function, that includes, in addition to procurement, responsibility for supply chain quality and inventories.
Marketing and sales
We market and sell our products with the objective of developing and maintaining an ongoing, highly interactive service and support relationship with our customers. We provide prospective customers with extensive process and product data, provide opportunities for tests on demonstration equipment and, if required, install evaluation equipment at the customer’s site. Once equipment has been installed, we support our customers with, among other things, extensive training, on-site service, spare parts and process support. All of this is further supported by in house development to enhance the productive life of existing equipment. We make hardware improvements available in the form of retrofit kits as well as joint development of new applications with our customers.
Because of the significant investment required to purchase our systems and their highly technical nature, the sales process is complex, requiring interaction with several levels of a customer’s organization and extensive technical exchanges, product demonstrations and commercial negotiations. As a result, the full sales cycle can be as long as 12 to 18 months. Purchase decisions are generally made at a high level within a customer’s organization, and the sales process involves broad participation across our organization, from senior executive management to the engineers who designed the product.
To market our products, we operate demonstration and training centers where customers can examine our equipment in operation and can, if desired, process their wafers for further in-house evaluation. Customers are also trained to properly use purchased equipment.
To execute the sales and service functions, we have established a global sales force, in which all regional units report directly into the global sales organization. We have sales offices located in Europe (in the Netherlands, France, Ireland, Germany and Italy), Israel, Taiwan, South Korea, the People’s Republic of China, Singapore, the United States and Japan. At the end of 2014, 303 employees were employed in sales and marketing, representing 19% of our total staff.
We sell our products predominantly to manufacturers of semiconductor devices and manufacturers of silicon wafers. Our customers include most of the leading semiconductor and wafer manufacturers. Our customers vary from independent semiconductor manufacturers that design, manufacture, and sell their products on the open market, to large electronic systems companies that design and manufacture semiconductor devices for their own use, to semiconductor manufacturers, known as foundries that manufacture devices on assignment of other companies, including 'fabless' companies that design chips but do not have wafer processing factories.
For our wafer processing segment our largest customer accounted for approximately 33.6%, 28.3% and 26.7% of our net sales in 2012, 2013 and 2014, respectively. Our ten largest customers accounted for approximately 75.3%, 85.6% and 84.1% of our net sales 2012, 2013 and 2014, respectively. Historically, a significant percentage of our net sales in each year has been attributable to a limited number of customers; however, the largest customers for our products may vary from year to year depending upon, among other things, a customer’s budget for capital expenditures, timing of new fabrication facilities and new product introductions.
We provide responsive customer technical assistance to support our marketing and sales. Technical assistance is becoming an increasingly important factor in our business as most of our equipment is used in critical phases of semiconductor manufacturing. Field engineers install the systems, perform preventive maintenance and repair services, and are available for assistance in solving customer problems. Our global presence permits us to provide these functions in proximity to our customers. We also maintain local spare part supply centers to facilitate quick support.
We provide maintenance during the product warranty period, usually one to two years, and thereafter perform maintenance pursuant to individual orders issued by the customer. In addition to providing ongoing service, our customer service operations are responsible for customer training programs, spare parts sales and technical publications. In appropriate circumstances, we will send technical personnel to customer locations to support the customer for extended periods of time in order to optimize the use of the equipment for the customer’s specific processes. The availability of field support is particularly important for a sale. 517 employees were employed in customer service at the end of 2014 representing 32% of our total staff.
The semiconductor equipment industry is intensely competitive, and is fragmented among companies of varying size, each with a limited number of products serving particular segments of the semiconductor process. Technical specifications of the individual products are an important competitive factor, especially concerning capabilities for manufacturing of new generations of semiconductor devices. As each product category encompasses a specific blend of different technologies, our competitive position from a technology standpoint may vary within each category. Customers evaluate manufacturing equipment based on technical performance and cost of ownership over the life of the product. Main competitive factors include overall product performance, yield, reliability, maintainability, service, support and price. We believe that we are competitive with respect to each of these factors, and that our products are cost effective.
As the variety and complexity of available machinery increases, some semiconductor manufacturers are attempting to limit their suppliers. In addition, semiconductor manufacturers are located throughout the world, and expect their equipment suppliers to have offices worldwide to meet their supply and service needs. Semiconductor equipment manufacturers with a more limited local presence are finding it increasingly difficult to compete in an increasingly global industry.
Our primary competitors are from the United States, Japan and South Korea. In each of our product lines, we compete primarily with two or three companies which vary from small to large firms in terms of the size of their net sales and range of products. Our primary competitors include Applied Materials, LAM Research Corporation, Tokyo Electron, Hitachi Kokusai, Wonik IPS, Eugene Tech and Jusung.