A New Approach to Yield Enhancement

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A New Approach to Yield Enhancement

Rudolph’s Strategic Acquisition of Adventa

By Paul McLaughlin, chairman and CEO, Rudolph Technologies, Inc.

Rudolph Technologies’ recent history and long-term future strategy include significant growth through acquisition. In addition to basic financial value, we have identified a number of key attributes that guide our search for acquisition candidates, all pursuant to our underlying strategic goal of occupying a dominant position in every market we serve.

Desired attributes include: complementary capabilities that allow the value of the whole to be greater than the sum of its parts; opportunities to introduce new products (ours and theirs) to new customers in the respective installed customer bases; and the opportunity to enhance customer satisfaction through the leverage of our worldwide sales and support organizations.

For example, in August 2009, we announced our acquisition of Adventa Control Technologies. A review of the reasoning behind this acquisition illustrates the underlying strategy and selection criteria.

While both Rudolph and Adventa are leaders in process control software, we have approached the problem from different directions, and much of the value promised by this combination lies in the complementary nature of the solutions each of us has developed. Rudolph’s expertise in process analysis derives from our roots in measuring and inspecting the results of the process on the wafer. Our inspection and metrology systems provide extensive capabilities for defect detection and classification, defect signature analysis, process metrology and e-test analysis. Our process control software focuses on the analysis of defect and inspection data, and includes solutions designed to alert operators to process excursions and analyze relationships between in-process metrology measurements and end-of-line yield and electrical test results.

Adventa is long-standing leader in the area of process tool control/monitoring and fault detection/classification (FDC). The Adventa approach to process control grew from its expertise in monitoring process equipment. Its software emphasizes parameter monitoring, fault detection and trending in transport and process modules, including load locks, vacuum systems, cassette elevators, robots, energy sources, gas/fluid systems, and more. Over 18,000 active systems currently use Adventa software products, and customers for those products include leading equipment manufacturers, chip makers and foundries, with installations in nine of the top semiconductor manufacturers in the world.

Current economic conditions have increased the pressure on semiconductor manufacturers to reduce the use of internal resources, while at the same time, improving factory profitability through the implementation of enhanced process control and automated analysis solutions.

With the addition of Adventa, Rudolph can provide its customers the ability to correlate wafer condition process data against process tool monitoring data to achieve more intelligent run-to-run control. Using simplified on-tool recipe management systems, customers can take a proactive approach to yield management— with all systems working together as a single orchestrated technology, resulting in a dramatic reduction in excursions and increase in yields. Deployment of advanced process control (APC) solutions among device manufacturers has demonstrated high returns on investment, with results including improvement of up to 50 percent in process capability for key processes.

Current economic conditions have also reduced company valuations across the board, creating unique opportunities for strategic acquisitions. Leveraging the unique value proposition of the combined software solutions through our worldwide sales and service organization, we expect to realize increased revenues from the outset. We will introduce the advantages of the Adventa products to a wider market through the many customer relationships we already enjoy, not only in the semiconductor processing sector, but also in other strategic markets, such as advanced packaging, MEMS and photovoltaic manufacturing. While we are projecting an increase in software revenues that will positively impact our bottom line, some of this revenue, in turn, will be put into R&D to develop and deliver the next-generation process control package.

Adventa joins Rudolph as an addition to our existing Data Analysis and Review Business Unit, putting us in a solid number two position in the process control software market. Unlike our competitors, our expanded solution will be unique in its ability to combine wafer metrology and process tool data for more effective run-to-run (R2R) control, while at the same time, significantly reducing integration and ownership costs.

Paul F. McLaughlin has served as the Rudolph Technologies Chairman since January 2000 and Chief Executive Officer and as a director of the Company since June 1996. Mr. McLaughlin has over 20 years experience in the semiconductor capital equipment business including six years as Vice President at Perkin-Elmer Corporation, a pioneer in optical lithography. Mr. McLaughlin holds a B.S. in Metallurgical Engineering from Rensselaer Polytechnic Institute, an M.S. in Metallurgy and Materials Science from Lehigh University and an M.B.A. from Harvard University, Graduate School of Business Administration.

December 1, 2009