Excimer specialist makes inroads into car industry

24 Sep 2002

Excimer-laser maker Lambda Physik is branching out into the automotive industry and expects revenues from its latest venture in extreme ultraviolet technologies next year. Jacqueline Hewett finds out more from its chief executive officer, Dirk Basting.

From Opto & Laser Europe October 2002

Dirk Basting, chief executive officer and co-founder of Lambda Physik, has plenty to boast about. His 31-year-old company has built up a formidable market presence. It has just seen one of its best years ever in terms of sales - which are distributed impressively equally across Europe, the US and Asia.

Now employing some 400 people worldwide, Lambda Physik is starting to cash in on the many new and emerging applications for excimer lasers, such as their use in car manufacture, flat-panel displays and medicine. The company's interests have also expanded into up-and-coming technologies for next-generation lithography, and into sources other than its traditional excimers.

Evolving into prominence The firm's scope and success today is a far cry from its humble beginnings. In 1971 the fledgling business, spun off from the Max Planck Society, was staffed by just two people: Basting and a fellow physical chemistry PhD student, Bernd Steyer. The company's manufacturing headquarters were housed in Basting's garage. But the small scale of their operation did not dent the enthusiasm of the young pair.

"There are two types of entrepreneur," said Basting. "Ones who start a company with a vision that it might one day be another Microsoft, and others, like me, who love the technology they are developing. We were very proud of our achievements."

Basting is the first to admit that he did not expect to find himself growing a product that would yield annual sales of more than €100m. "We would proudly show off the laser we were developing, which at that time held many world records in terms of power and intensity," he said. "But we did this in tandem with our PhD work. We said at the time that you never know - if it didn't work out then at least we would have good academic degrees and could be employed by a chemical company."

It did not come to that, however. "Our first customer, Zeiss, even pre-financed us to develop and build something for them," explained Basting. "They also helped us to finance the patent for the device. So that was ideal starting conditions."

Since then, Basting and Lambda Physik have not looked back. The company introduced the first commercial excimer laser in 1977, attracted Coherent on board as an investor in 1981, and finally began trading its shares on the German stock exchange in September 2000. The latest success story came in June of this year, when the company won a €1.7m order to supply excimer lasers to an undisclosed German car maker.

Basting told OLE: "This is the first time that excimer lasers have been used to improve the performance of the engine. Illuminating the inside of the cylinder with an excimer laser leads to a better surface that does not require so much oil. The consumption can be reduced by 75% in this way."

Basting anticipates follow-on orders once the process becomes established. "We're looking forward to more orders to do this on a larger basis in the future, and not just for cylinder walls," he said. "Treating injection nozzles could lead to a more economical car by reducing fuel consumption."

Unique applications The company is also looking to cash in on a second area in which excimers have found a unique application: flat-panel displays. As use of multimedia devices increases, consumers are demanding displays with ever-faster refresh rates. Basting says that a new type of polycrystalline flat-panel display is the answer - and the only way to make it is with pulses from an excimer laser.

Flat-panel displays are typically made by integrating transistors into the surface of amorphous silicon. But amorphous silicon gives displays with low refresh rates. "We would like to use single-crystalline silicon because that is the basis of all chips," explained Basting. "However, this would need to be transparent, and making a single crystal of that size is not possible."

The next best option is to use a multicrystalline structure, which can be made by treating amorphous silicon with an excimer laser, says Basting. "You illuminate with the laser and that leads to a short melting of the silicon. It solidifies and crystallizes. That's the way to make transistors on the screen. The laser simplifies the process and increases the display's refresh rate."

Although this year has opened new doors for Lambda Physik, the company has nevertheless felt the effects of the downturn in the semiconductor industry.

"Last year was one of our best, and our sales were close to €140m," reflected Basting. "Without the situation in the semiconductor industry it would have also been our best year in terms of earnings. Taking unplanned reserves into account, which became necessary due to the downturn in the semiconductor industry, net income fell from €9m to €1.6m."

For the fiscal year 2002, Lambda Physik had to forecast a reduction in sales of more than 25%. As a result, cost-cutting measures have seen staff numbers fall from 450 at their peak to today's total of 400. The company has also bought back a 98% majority stake in Optomech, which it originally spun out at the beginning of 2001.

Investing in the future Even in these tough times, however, the company is still investing in technology for the future. In May 2001 Lambda Physik joined forces with fellow German laser manufacturer Jenoptik Laser Optik Systeme to form XTREME technologies. Since then, the 50:50 joint venture has been developing sources emitting in the extreme ultraviolet (EUV) aimed at next-generation lithography for making integrated circuits. Each partner will plough some €2.5m into the venture this year alone.

As the size of structures on silicon chips keeps shrinking, soon even the shortest wavelengths of an excimer laser (157 nm) will be too long to satisfy the needs of the lithography process. "This is why it's a good idea to invest early," explained Basting. "With EUV emitted at 13.5 nm, [XTREME technologies] will be able to manufacture many more structures. Our goal is the ultimate lithography tool."

And the partnership is flourishing. "We have already succeeded in making prototype light sources with the highest output power, some 10-20 W, for a discharge plasma source," said Basting. The requirement for the first next-generation lithography systems is 30-40 W.

With the prototypes now in place, Basting and Lambda Physik will again look to push their EUV devices into other areas where they may find unique applications. Basting believes that before the production tools for the semiconductor industry are realized, Lambda Physik will exploit scientific applications, such as identifying small biological structures. "For us, the whole exercise will not be as expensive as for companies who are purely playing in the lithography market," he said.

So it looks as though Lambda Physik may yet again be in the right place at the right time to exploit its technology and reap the commercial rewards. "We anticipated the first sales from EUV tools in 2007, but now we expect to have revenues in 2003," Basting told OLE. This tremendous acceleration should ensure that Lambda Physik will be a major lithography player when the market returns, and the company's current diversification into other areas will no doubt stand it in good stead for many years to come.