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SEZ Group focuses on Single-Wafer-Technology
Exit from wet bench business
The SEZ Group (SXW Swiss Exchange: SEZN) announced that it has taken steps to refocus its resources on single-wafer wet surface preparation technology. This move includes the closing of its wet bench production facility in Donaueschingen, Germany, referred to as SEZ Germany, formally known as HMReinraumtechnik GmbH, which was acquired by the SEZ Group in February 2001. The second step in this prioritization is the shift of resources to SEZ's core business, patented single-wafer equipment for microchip production. To further facilitate this refinement the SEZ Group reduced its global workforce by 20-percent from 750 to 600 employees worldwide. The SEZ Group's staff reduction includes the Donaueschingen facility but will not affect the company's service, process and sales support.
Additionally, SEZ's decision will not negatively affect the IP and products developed by its California Research Center (CRC), which was acquired as L-Tech technologies last year. In fact, the elimination of the burdens associated with the commodity product line, wet benches, will provide new opportunities for SEZ to expand its customer base without having to compete in the low-margin wet bench equipment market.
Restructuring affects business years 2002 and 2003
As part of the withdrawal from the wet bench business, the SEZ Group will be required to depreciate assets (primary property, plant and equipment, inventories and goodwill), which will be charged back to business year 2002. Therefore, the SEZ Group will show a net-loss in the range of CHF 12 to 15 million for business year 2002 instead of the originally expected net-profit of more than CHF 10 million. Additional operating costs and consequences from the worldwide workforce reduction will be charged against the half-year result for 2003. The business restructuring refocus on single-wafer technology product development will lower the SEZ Group's breakeven level significantly, starting in the third-quarter of 2003. SEZ's financial plan is to lower the company's breakeven from CHF 45 million to below CHF 40 million per quarter beginning in the ensuing third-quarter. By implementing these cost reductions SEZ expects to build upon its current cash position.
Condition for sustainable growth strengthened
In fiscal year 2002, under the pressure of the continuing downturn, the total wet surface preparation market shrank by nearly 40-percent to USD 1 billion (Dataquest: January, 2003). This drastic decline has caused extreme pricing pressure, especially in the wet bench segment. During the same time period the SEZ Group increased its market share in the wet surface preparation market from 9.6 to more than 12 percent. This gain was solely due to single-wafer technology product line sales, which is dominated by SEZ with a market share of 70 percent.
About SEZ
The SEZ Group is a leading supplier of wet wafer surface preparation equipment to the global semiconductor manufacturing industry. The company's breakthrough proprietary Spin-Processor technology forms the basis of a broad portfolio of single wafer backside and frontside wafer surface conditioning products for semiconductor chipmakers worldwide. SEZ maintains development, manufacturing, sales, marketing and service operations in Europe, Japan, Asia-Pacific and North America. Registered in Zurich, Switzerland, SEZ Holding AG is listed on the Swiss Exchange under the symbol (SWX: SEZN) since 1996.
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