We are very pleased with our financial results for both the fourth quarter and the year. Details of those results were reported October 17th during our year-end conference call and press release. Orders, sales and income were all up for the quarter and the year, and we finished the year with a net income of $3.2 million. We are particularly pleased with our success in Asia where year-over-year orders were up 138%.
While improved industry conditions contributed to our improved orders and financial performance in fiscal 2006, we made excellent progress on many of the strategies we established at the beginning of the year, including:
- Expand Presence at Key Accounts – Establishing a ‘Tool Of Record’ status at several new customers while expanding our TOR, for our flagship products at some of our existing accounts;
- Expand FSI Products and Applications – Deploying ‘Best Known Methods’ for several targeted process applications while expanding the overall applications capabilities of our flagship products;
- Align our Technology Roadmap with Key Customer Requirements – Increasing the frequency of technology roadmap exchanges with key customers while initiating a plan to conduct our successful ‘Knowledge Services™ Seminar’ in other regions of the world; and
- Improve Shareholder Return – Improving our quarterly financial performance in fiscal 2006 with a return to profitability in the fourth quarter.”
Immersion Cleaning
We subdivide the market into immersion, batch spray, single wafer wet, and defect reduction segments. The immersion market segment addressed by our MAGELLAN® system continues to represent more than 50% of the total wet cleaning market. From its introduction, our MAGELLAN® system has delivered unparalleled process performance and configurability. Our proprietary STG® IPA dryer and MegLens™ acoustic defuser technologies contribute to the superior particle removal and defectivity performance of this product. Our novel chemical mixing capability contributes to the batch uniformity and the nitride etch selectivity of the tool. As we have described in an accompanying article in this newsletter, we have now increased the maximum throughput of the MAGELLAN® system to up to 400 wafers per hour. This positions the MAGELLAN® product for additional opportunities with the memory producers. During the year we added another leading semi-conductor manufacturer to the MAGELLAN® system user base. This customer has placed initial HVM orders for shipment in fiscal 2007, and we anticipate adding additional customers during '07.
Batch Spray Cleaning
Our ZETA® batch spray system has been a workhorse for customers since it was introduced. We now have over 100 systems in production at customers in all regions. During the year we increased our tool of record position with several customers and expanded the applications capability of the system. For example, in the third quarter we introduced our patented new viper technology on our ZETA® G3 platform. This application, as demonstrated in production, eliminates the need for ashing on most implanted photo resist strip steps. In addition, in 2006 we expanded the user base for our ZETA® system when used for platinum nickel strip, cobalt and nickel silicide in contact clean applications. It is anticipated that a significant portion of our revenue growth in fiscal '07 will come from repeat and new customer orders for the ZETA® system running the new ViPR™ application.
Cryokinetic Aerosol Cleaning
With the continued trend to small future sizes, Gartner is forecasting a 19% CAGR 2005 to 2011 for cryokinetic cleaning. FSI's ANTARES® System addresses this segment of the market, and we have more than ten device manufacturers using our technology in production. Our cryokinetic cleaning technology is used extensively for BEOL copper cleaning applications but has also demonstrated utility for several FEOL applications. ANTARES® system effectively removes fall-on type defects from airborne particles and from deposition, etch, and CMP processes. Our novel, patented cryokinetic aerosol technology cleans the wafer without inducing defects such as added particles, water marks, streaks, or surface charging that are common with alternative particle removal technologies. We are anticipating an increase in unit sales for this product in fiscal '07 as device manufacturers ramp their 65 nanometer production and continue the qualification of products for 45 nanometer applications.
Single Wafer Wet Cleaning
Finally, the single wafer wet segment, representing nearly 30% of the total wet clean market, is the fastest growing segment. We shipped our first system, a product that has been under development the past 18 months during the fourth quarter. This product is targeted for advanced single wafer wet applications in both the FEOL and BEOL manufacturing process flow. We do not expect any significant revenue from this product until next year as we focus on continuing to develop and demonstrate applications. However, the introduction of this product allows us to offer our customers solutions for nearly all surface conditioning process steps.
Conclusion
In summary, we are pleased with our 2006 performance and will strive to continue to improve on that performance next year. We will measure our performance based upon winning additional tool-of-record status with the top spenders and by our success in deploying best-known methods for use on our installed base of flagship products. Once again our performance is dependent on how well we execute each and every day. We're grateful for the confidence our customers have shown in 2006, and are pleased with our employees commitment to their success. We're confident that we can leverage our '06 successes into improved performance in '07.