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ESI ships first glass-cutting systems

09 May 2013

Orders up as the firm increases its focus on laser microfabrication.

Electro Scientific Industries (ESI), the Portland, Oregon, company aiming to transform itself into a world leader in laser microfabrication systems for semiconductor and consumer electronics manufacture, has shipped the first orders for its “DiamondBlaze” laser glass cutting tools.

CEO Nick Konidaris confirmed brief details of the deal in an investor call to discuss the firm’s latest financial quarter, in which ESI posted a substantial net loss as it wrote off parts of the business relating to the markets that it is exiting.

Konidaris said that a single customer had purchased three of the new glass-cutting systems. One of those is now in the field, with two more set to follow. The CEO is looking to target manufacturers of touch panels with the technology, and is expecting to receive more orders in the second half of calendar 2013.

“Laser cutting of touch-panel glass is emerging and looks like becoming a significant market for us,” he said, estimating that ESI could ultimately grow its sales of systems into the emerging market for strengthened glass to around $50 million per year.

A key advantage of new strengthened touch-panel glass is that it eliminates the requirement for a special layer of sensor glass currently used below the cover glass of smart phone or tablet devices. By switching to only one glass layer, it is estimated that touch panels could be made thinner and fabricated more cheaply.

Just a week ago, ESI also completed the acquisition of GSI Group’s semiconductor systems division, giving it a suite of wafer marking, wafer trimming and circuit trimming laser systems. ESI paid GSI $8 million in cash for the business unit.

In the latest quarter, which represented the final three months of ESI’s fiscal year 2013, the company posted sales of $39.6 million, up slightly on a sequential basis but down from $45.5 million a year ago.

$26M write-down
For the full year, ESI ended up registering a 15% year-on-year decline in sales to $217 million, suffering from the impact of much-reduced spending on capital equipment by LED chip manufacturers and the slumping silicon semiconductor industry.

The company has its new strategy in place, but the change in business focus hit ESI’s finances in the latest quarter as CFO Paul Oldham reported a $25.7 million charge for the restructuring and write-down of inventory and assets.

That resulted in a net loss of nearly $55 million for the year just completed, but ESI has plenty of cash assets and fiscal 2014 should get off to a much better start, with the company expecting to break even on sales of around $40 million.

“Our strategy to be the leading laser microfabrication company is on track,” said Konidaris. “We’re investing in 3D semiconductor, LED packaging and enabling laser technologies. We’re excited about our growth prospects.”

One of the company’s key assets as it sets about implementing that strategy is the rod fiber laser technology that it acquired through the buy-out of France-based EOLITE Systems last year.

Speaking at an investor day in March, ESI’s general manager for lasers, Tullio Panarello, indicated that the combination of rod fibers and advanced pulse-shaping capability would yield higher pulse energies and peak powers than conventional fiber architectures, combined with high pulse repetition rates and lower costs.

The rod designs are based on an 80 µm-diameter ytterbium-doped core surrounded by a 200 µm-diameter cladding area, inside a 2 mm-diameter fused silica rod.

As well as glass-cutting, target applications for ESI’s laser microfabrication systems include ceramic dicing, surface texturing, thin-film scribing and metal structuring – among many more.

Mad City Labs, Inc.Iridian Spectral TechnologiesCeNing Optics Co LtdECOPTIKAlluxaLaCroix Precision OpticsTRIOPTICS GmbH
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