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Tom Ryan, business unit manager in the Bend office of Nanometrics Inc., holds a 2-inch-diameter sapphire wafer that serves as the base for growing a light-emitting diode. Nanometrics makes the VerteX machine, seen in the background, to provide quality control in the LED manufacturing process.
Photos by Dean Guernsey / The Bulletin

Nanometrics: R&D for better LEDs

Bend-based high-tech staff supports major semiconductor clients

By Tim Doran / The Bulletin
Published: March 15. 2010 4:00AM PST

As its name suggests, Nanometrics Inc. operates on a small scale.

At the company’s Bend office, employees conduct research related to products measured in angstroms. One angstrom is about the size of one atom, said Tom Ryan, business unit manager in Nanometrics’ Bend office, and the light-emitting layer inside a light-emitting diode is 25 angstroms thick, Ryan said.

Some of the dozen employees — five of whom hold Ph.D.s — in the Bend office make quality-control systems to ensure that layer meets manufacturing standards.

“We make stuff that measures that layer,” Ryan said.

Based in Milpitas, Calif., Nanometrics provides machinery and systems for companies that make semiconductors, photovoltaics and high-brightness LEDs, which help light cell phone displays, televisions, headlamps used by hikers and other products.

In 2006, Nanometrics acquired Bend-based Accent Optical, which also provided equipment used for quality control in high-tech manufacturing plants.

Bruce Rhine, the former chairman and CEO of Accent and current Nanometrics board chairman, said in 2006 the two companies would complement one another, according to a news release announcing the acquisition. While both companies provided quality-control products, they only had a few overlapping customers, according to company statements.

The merger resulted in the company essentially having three business units, Ryan said, making quality-control systems for the semiconductor, high-brightness LED and photovoltaic industries, with the latter two a focus in Bend. The Bend-based employees deal with customers conducting research and development on new, and improved, LEDs.

“As their work transitions into mass production ... we have metrology (or measurement) tools for that production,” he said.

Many of the LEDs used for cell phone and television backlighting were made in plants that use Nanometrics’ equipment for quality control, Ryan said.

“What we do here enables that industry,” Ryan said.

Customers listed in its 2008 annual report, the latest available, include a couple who bill themselves as among the world’s top LED makers, or lighting companies, such as Philips Lumileds Lighting Co. and Osram Opto Semiconductor.

The names of some of Nanometrics’ semiconductor clients — Intel Corp., Micron Technology, Samsung Electronics and Toshiba Semiconductor — might be better known.

They essentially use Nanometrics’ systems to detect defects and measure the thickness, uniformity and other characteristics of computer chips during manufacturing, according to an investment research report from Morningstar.

Improving the manufacturing process helps the chip makers increase output and lower production costs, according to a Nanometrics news release.

The company’s revenues improved in the fourth quarter, its statements and filings show, although it posted a net loss of $0.3 million, according to a February announcement. In the fourth quarter of 2008, the company recorded a net loss of $2.6 million.

Nanometrics reported fourth-quarter revenues of $26.3 million, a 2 percent increase from the third quarter and a 29 percent increase from the fourth quarter of 2008, according to a news release.

The company had about 400 employees, total, at the end of December, Chief Financial Officer Jim Moniz told analysts in February, according to a transcript posted on the Nasdaq Web site.

Nanometrics completed a stock offering in December that brought the company $23.3 million in net proceeds.

For the year ending Tuesday, Nanometrics’ stock price ranged from around $1 a share on March 9, 2009, to $13.27 on Dec. 8, according to a Nasdaq stock report.

Tim Stultz, president and CEO, told analysts in February he expected the semiconductor industry to show continued improvement, which would increase demand for Nanometrics’ products, according to the transcript.

Stultz also predicts a potential increase for business in the high-brightness LED manufacturing sector, a sector that provided orders in November.

Customers in Asia placed multiple orders, Nanometrics reported, for equipment to support the expanding use of high-brightness LEDs in netbook computers and LCD televisions, Ryan said in a news release.

The vast majority of the Bend unit’s business comes from Asia, Ryan said in an interview. That translates into a lot of travel, some video conferencing with customers and employees who speak multiple languages.

Most of the Bend employees, some of whom came from Israel, Poland and other countries outside the U.S., speak more than one language.

“We can operate a global business from Bend,” said Christopher Raymond, technology development director. “All we need is a T1 line.”

And an airport with frequent service.

Along with sales, installation and other customer-related travel, Bend employees rely on flights from Redmond Airport to reach company headquarters in the San Francisco Bay area. Two of Nanometrics’ senior executives live in Bend and commute to California regularly.

“There’s a very strong Bend connection into that technology company,” Ryan said. “We could not survive without that airport.

“It’s our lifeline.”

Tim Doran can be reached at 541-383-0360 or at tdoran@bendbulletin.com.

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