Case Okmetic:
Expertise, innovation
and competitiveness
30 October 2015
Helsinki, Finland
Agenda
Introduction
Some perpectives on
• Expertise
• Innovation
• Competitiveness
Wrap-up
2 / President Kai Seikku / 30 October 2015
Okmetic
• Founded 1985 by Outokumpu and Nokia
• #8 silicon material company in the world, #1 by profitability since
2010
• 85% higher TSR than industry average, 40% higher TSR than any
other silicon material company since 2010
• Global operations (over 65% of sales outside the EU) but main
industrial base and almost all capex in Finland
3 / President Kai Seikku / 30 October 2015
Unbranded materials early in the electronics value
chain
E.g. automotive,
consumer
electronics, IoT,
healthcare,
process industry
Polycrystalline
supplier
Silicon wafer
supplier
8 BUSD
(Foundry)
Semiconductor
producer
325 BUSD
(System
supplier)
End product
producer
1,49 Trillion
USD
Okmetic is typically 2nd – 5th tier raw material supplier to IC industry’s Sensor and Discrete&Analog manufacturers
which do not follow Moore’s law as a design rule
4 / President Kai Seikku / 30 October 2015
But everyone here carries a little something from
Okmetic in his/her pocket…
Auto-focus actuator
for camera
Switch mode power
supply
Humidity sensor
4G LTE radio front-end:
• BAW duplexers
• RF Switch / Variable Capacitor
Micro-mirror for pico-projectors
and scanners
Pressure sensor for navigation
Motion sensors:
• Accelerometer and
gyroscope for screen
orientation
• Gameplay and navigation
Compass for navigation
Fuel cell for longer use
BAW Filter for WLAN
(WiFi and 4G WiMAX
connectivity)
5 / President Kai Seikku / 30 October 2015
2-4 Microphones for noisecancellation and voice control
Oscillator for timing
…not to mention in the parking lot
Barometric pressure sensor, inertial
sensor and compass for navigation
Micro-mirror for smart
headlamps & head-up display
Pressure sensors, flow
sensors and strain gauges
for engine management
Bolometer for night-vision
IR imager for pedestrian detection
Vehicle radio link
Pressure sensor, TPMS
Bluetooth connectivity
Pressure sensor
for brake-booster
Microphones for hands-free phone
Gyroscopes and accelerometers
for electronic stability control and
roll detection
Smart power for peripherals
Power electronics for hybrid
and electric vehicles
6 / President Kai Seikku / 30 October 2015
Inclinometers for zero set,
theft alarm, e-park brake,
headlight level
Radars for collision
avoidance and gesture
recognition
Or just about everywhere, surrounding us
7 / President Kai Seikku / 30 October 2015
Introduction
Some perpectives on
• Expertise
• Innovation
• Competitiveness
Wrap-up
8 / President Kai Seikku / 30 October 2015
Okmetic’s strengths
Crystal growing
High-performance
wafer manufacturing
Agile
supply chain
Customer relations
Okmetic is the market leader in silicon-based solutions in its chosen market segments
as well as a technological pioneer.
9 / President Kai Seikku / 30 October 2015
Long-term focus on selected niches
Market size estimate for 2015, BUSD
• Two segments: Sensor wafers and
Discrete&Analog wafers
• Both segments building on shared
capabilities: 150 and 200mm
technology, SOI technology and
crystal properties
• Dominant categories; memory, logic
and micro circuits on 300 mm
platform remain outside Okmetic’s
scope.
Data source: World Semiconductor
Trade Statistics WSTS, Q2 2015
10 / President Kai Seikku / 30 October 2015
Importance of customer coverage: Supplying over
80% of top 30 sensor manufacturers
Texas Instruments
Knowles Electronis
Qorvo
Hewlett Packard
Avago Technoliges
Freescale
Amphenol
Sensata
Invensense
Analog Devices
Infineon
Ulis
Honeywell
UTC Aerospace Systems
Robert Bosch
Canon
Kionix
Measurement
Specialities Inc.
ST Microelectronics
Flir Systems
Melexis
Denso
Panasonic AKM
Murata ALPS Electric
Seiko Epson
Omron
Goertek
MEMS part of Sensor segment
11 / President Kai Seikku / 30 October 2015
Source: Modified from Yole Développement
Importance of customer coverage: Supplying more
than 80% of discrete semiconductor manufacturers
ON Semiconductors
Fairchild
Vishay
Microsemi
Powerflex
Infineon
NXP
ST MicroIxys electronics
ABB
IGBT and power MOSFET key areas of D&A segment
12 / President Kai Seikku / 30 October 2015
Hitachi Mitsubishi
Electric
Rohm Fuji Electric
SanKen Toshiba
Renesas Panasonic
Shindengen
Source: Modified from Yole Développement
Supply chain based on specialization and partial
outsourcing
Vantaa plant, Finland
• Crystal growth
• Sensor wafers
• Demanding Discrete&Analog wafers
• Advanced wafers (SOI)
Allen plant, Texas, USA
• Value-added wafers (EPI)
Fab lite (outsourced) capacity, Japan
and China
• Discrete&Analog wafers
13 / President Kai Seikku / 30 October 2015
Agile operations key capability
• Operations to support fast changes in demand, or in product mix.
• Vantaa plant specialized in high value-added products and flexible
small-batch production
• In sudden demand shifts, wafer capacity can be increased without
investment by using fab lite (outsourced) capacity. Okmetic the only
silicon wafer supplier utilizing competitors’ production capacity for part
of its deliveries.
14 / President Kai Seikku / 30 October 2015
Agile operations in high demand
Vantaa wafer capacity
150 mm SSP
200 mm SSP
High
valueadded
products
150-200 mm CAP
100-200 mm DSP
100-200 mm SOI
15 / President Kai Seikku / 30 October 2015
200 mm fab lite
150 mm fab lite
Agile operations in lower demand
Vantaa wafer capacity
150 mm SSP
High
valueadded
products
200 mm SSP
150-200 mm CAP
100-200 mm DSP
100-200 mm SOI
16 / President Kai Seikku / 30 October 2015
200 mm fab lite
150 mm fab lite
Many competences need to be built to enable flexible
production
Vantaa wafer capacity
Vantaa always at capacity
= cost effective
manufacturing process
150 mm SSP
High
valueadded
products
Qualified products
Qualified products
Multiskilled personnel
200 mm SSP
Fab lite
partners with
• overcapacity
• adequate
technical
capability and
cost structure
Process tools capable for
different product mix
and wafer size
150-200 mm CAP
Fast new product creation and
culture to manufacture various
small batch specifications
100-200 mm DSP
SOI Substrates
17 / President Kai Seikku / 30 October 2015
200 mm fab lite
150 mm fab lite
People make the difference
•
Personnel’s competence internationally competitive
•
All production personnel have at least basic degree in
chemical technology
•
Multiskillness developed for more than 10 years
•
Every 7th white-collar employee has a PhD
•
All personnel groups are within the scope of incentive
schemes
•
Very good cooperation with Aalto University in recruiting
new talent (summer interns (40+) most important source)
18 / President Kai Seikku / 30 October 2015
Quality absolutely key in obtaining and retaining
business
• All relevant quality and environmental
certificates (ISO 9001, TS 16949, ISO
14001)
• Compliance with industry regulation
(REACH, RoHS directive and the GADSL)
• Quality and environmental certification
required also from subcontractors (ISO
9001, ISO 14001)
• Improvements driven by Six Sigma and
Lean manufacturing tools
• Okmetic’s production lines and systems
audited continuously by main customers
19 / President Kai Seikku / 30 October 2015
Introduction
Some perpectives on
• Expertise
• Innovation
• Competitiveness
Wrap-up
20 / President Kai Seikku / 30 October 2015
New products to account for over 40% of business
by 2020 – constant need for innovation
100 %
90 %
New customers &
new products
80 %
70 %
60 %
Current customers &
new products
50 %
40 %
30 %
Current customers &
current products
20 %
10 %
0%
2015 E
2016 E
21 / President Kai Seikku / 30 October 2015
2017E
2018 E
2019 E
2020 E
Differentiation through joint material development /
shared R&D with customers
Benefits: cost reduction, faster cycles, shorter time to market and
process streamlining
Design
Prototype
Wafer
tailoring
22 / President Kai Seikku / 30 October 2015
Volume
manufacturing
R&D roadmaps extend beyond 2020, guiding
investments and setting customer priorities
200 mm platform
Crystal development
SOI
development
New power products
Substrate for Smart Power
Enhanced platform product for RF
Advanced HRS product
Laser TSV
Improved C-SOI product
2015
23 / President Kai Seikku / 30 October 2015
Complete
sensor
platform
2020
Okmetic’s R&D model – utilisation of external reseach
partners and close cooperation with customers
Silicon clusters
around the world
Science
communities
Customers
Local silicon
cluster
Ideas, weak signals,
market knowledge,
technology development
Financial
instruments:
• Tekes
• EU
• Other
investors
24 / President Kai Seikku / 30 October 2015
Refining and
rejecting ideas
Ideas for new product
development
Innovation a prerequisite for survival
• In electronics, value chain is always looking for cost efficiency
• Innovation can relate to process, use of tools, raw materials,
logistics etc.
• Targets can be defined by customer or own needs and priorities
• Roadmaps should never replace out-of-the box thinking
• Important to indentify innovation – capable engineers (not everyone
is), and free up their time
25 / President Kai Seikku / 30 October 2015
Introduction
Some perpectives on
• Expertise
• Innovation
• Competitiveness
Wrap-up
26 / President Kai Seikku / 30 October 2015
ASP erosion makes silicon wafers a very tough, lowgrowth industry
12000
Silicon wafer market value USD
10000
Millions
8000
6000
4000
2000
0
2010
2011
Source: SEMI, May 2015 and October 2014
27 / President Kai Seikku / 30 October 2015
2012
2013
2014
Forecast 2015 Forecast 2016
Focusing on high-value products, Okmetic has managed
to escape commotidization and develop a price premium
Average Silicon Wafer Price, $/Sqi
>20%
~100%
Market price figures provided by SEMI
28 / President Kai Seikku / 30 October 2015
How did we get there and how to maintain price
premium in a competitive market?
• 100% customer penetration in main segments
• Readiness to sacrifice any products that get commodotized, every
•
•
•
•
year
Strong focus on customer-driven NB pipeline
Embrace complexity and verify, time after time, Okmetic’s
commitment to develop the most ”impossible” wafers and materials
Dare invest in capability first and foremost. Capacity is secondary
Have faith in Finnish engineers.
29 / President Kai Seikku / 30 October 2015
Introduction
Some perpectives on
• Expertise
• Innovation
• Competitiveness
Wrap-up
30 / President Kai Seikku / 30 October 2015
Focused offering and business model for continuous
success
• Technology advancing on a broad front, providing a growth market
•
•
•
•
•
well into the foreseeable future
Shared technology platforms leveraged across both customer
segments
Capex for capacity and capability
Flexible supply chain
Continued focus on cost efficiency in a highly competitive industry
Resilience to ASP erosion through specialization and long-term
development of technologies
31 / President Kai Seikku / 30 October 2015
Thank you.
32 / President Kai Seikku / 30 October 2015