Silicon Valley Technology Center (SVTC) was recently sold by Cypress Semiconductor to Tallwood and Oak Hill venture firms. The company provides process development and commercialization services and expects to have $40-50 million in profitable revenue this year with 30 percent of their business coming from MEMS customers. We recently spoke with Dave Bergeron, the CEO of SVTC, about the company’s business model, current customers and plans for the future.
MEMS Investor Journal: What is SVTC’s history?
Dave Bergeron: We started doing 65nm R&D as Silicon Valley Technology Center (SVTC), an official subsidiary of Cypress, in July 2004. Cypress announced the sale of SVTC to Tallwood and Oak Hill venture firms in January 2007, and the sale was completed in March. Our new name is SVTC Technologies and on May 21 we debuted a full suite of commercialization services.
MEMS Investor Journal: What are SVTC’s unique processes and expertise?
Dave Bergeron: We offer customers access to a full-scale, 8-inch development foundry where they can either develop their own products in silicon or hire SVTC experts to do the development, and leverage a full complement of advanced CMOS equipment, development support tools and commercialization services.
MEMS Investor Journal: What makes SVTC different from other foundries?
Dave Bergeron: There is no other 8-inch, independent, IP-secure, process-development-only foundry.
MEMS Investor Journal: Since you are not a volume production facility, how to you typically work with customers to transition them to volume production foundries? Which MEMS volume production foundries are doing a good job these days?
Dave Bergeron: Since there is such diversity in MEMS processes, fabless MEMS manufacturers must find a foundry partner willing to take on their processes, and then transfer the technology to the foundry partner. That’s the point behind our new Fast Xfer services. We’ll work with customers on equipment stability and baseline process stability, process book creation and management, gap analysis and commonality review, test vehicles, process qualifications and yield improvement. When you get all this right, the interface and transfer to a production foundry is smoother and takes less time. And, most importantly, for both foundries and customers, yield ramp is faster.
As for MEMS foundries doing a good job, there is a generous handful. For example, our client SiTime is working very well with both giant TSMC and the specialty foundry Jazz.
MEMS Investor Journal: Did you already work with MEMS companies before the sale to Tallwood and Oak Hill? If so, why did Cypress want to be in this business?
Dave Bergeron: Yes we did. SiTime is probably the highest-profile fabless MEMS device company that started developing at SVTC before the sale. Silicon Clocks and Cavendish Kinetics are also developing MEMS products. But SVTC was never – and is not now – in the MEMS business. Our business is process-technology development and commercialization services to companies developing MEMS and other innovative devices and processes in a number of silicon applications.
MEMS Investor Journal: Why did Cypress decide to sell SVTC?
Dave Bergeron: Cypress CEO T.J. Rodgers has stated that ownership of a development fab is not strategic for Cypress and that it is more cost-effective for Cypress to be a SVTC customer than an owner.
MEMS Investor Journal: How did the spin-off affect you?
Dave Bergeron: SVTC now will have more access to capital and a dedicated management team able to focus on the customers' issues. In the next few months, we will start executing our vision as an independent process development foundry.
MEMS Investor Journal: Who are SVTC’s customers?
Dave Bergeron: We work with more than 20 companies, including MVC, SanDisk, ASI, Unity, Zettacore in the memory and logic markets, Cavendish, Miradia, SiTime, Spatial Photonics, and Silicon Clocks in MEMS, and Complete Genomics in Biotech.
MEMS Investor Journal: What do your customers make at SVTC?
Dave Bergeron: Customers develop their products on silicon with a full complement of advanced CMOS equipment and commercialization services in our full-scale, 8-inch process development foundry.
MEMS Investor Journal: How much do your services cost?
Dave Bergeron: The cost is at minimum approximately $100,000 per month. If a typical process-development project costs $5 million over two years, the cost to develop at SVTC might represent something approximating half of that.
MEMS Investor Journal: How many people does SVTC employ?
Dave Bergeron: SVTC has 100 employees right now.
MEMS Investor Journal: How much revenue did SVTC have in 2006?
Dave Bergeron: In 2006, we were part of Cypress, and so revenues weren’t broken out. However, we expect it to be in the range of $40-50 million in 2007.
MEMS Investor Journal: What percent of your business is with customers who are developing MEMS products?
Dave Bergeron: About 30 percent — because our 8-inch wafer capabilities serve companies in this space extremely well. With us, MEMS companies have the advantage of direct transfer to 8-inch manufacturing lines. And our 200mm CMOS background provides a quality standard for volume manufacturing of MEMS devices.
MEMS Investor Journal: Are you profitable?
Dave Bergeron: Yes, since the first quarter of this year.
MEMS Investor Journal: Do you plan to have MEMS products of your own or will you remain a process development facility exclusively for your customers?
Dave Bergeron: We’ll always be looking at all options for growth, but it’s unlikely that we will be developing commercial products.
MEMS Investor Journal: Do you plan to enter MEMS volume production foundry business?
Dave Bergeron: Again, not likely. The business opportunity for SVTC is in contracting for new process and material development, not production. There is a growing demand from both IDMs and fabless companies for professionally managed development fabs and development teams like ours. Also, there is a concentration of customers in Silicon Valley, so it makes sense for us to offer these kinds of services in San Jose.
MEMS Investor Journal: Since you work with so many start ups, which interesting MEMS applications do think will be commercialized in the next few years? Which MEMS applications do you think are excessively “hyped up”?
Dave Bergeron: From where we sit, anything’s possible. MEMS are right now finally coming of age. We’re seeing volume production of microphones, oscillators, resonators, accelerometers, RF switches and what-have-you for both industrial and consumer markets. We’ve seen an explosion of fabless MEMS companies using not just new designs but new structures. In our opinion, the application which integrates a “MEMS solution” with CMOS circuits is likely to offer added and unique functional capabilities.
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Dave Bergeron brings to SVTC recent semiconductor and entrepreneurial experience from Tallwood Venture Capital, where he evaluated semiconductor chip products and equipment opportunities as part of the Executive-in-Residence program. Dave has held senior management positions at Applied Materials, Candescent Technologies and IBM Microelectronics, where he was responsible for equipment product lines, fab operations and tech product development in areas ranging from CMOS chips to advanced displays. Dave has authored 17 U.S. patent grants and has published more than 30 technical bulletins and papers. He holds a BS in Physics and a MS in Applied Mathematics from Georgetown University.
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