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TWST: Can we start with an introduction to ICOS Vision Systems (NasdaqNM:IVIS), perhaps including a brief historical sketch?

Mr. DeProft: We were founded in 1982 as a spin-off of the local university here in Leuven, which is one of the largest universities in Europe. In fact, IMEC, one of the largest worldwide independent research institutes in the semiconductor market, was also one of the spin-offs of this university. We are still headquartered here in Belgium, and we are mainly active in the development, engineering and sales of capital equipment for the inspection of semiconductor packages, which is situated in the back-end of the semiconductor market. This is typically, what we call, the finishing equipment, i.e. the equipment allowing for the final inspection of the package as well as the taping because typically these packages are shipped in tape to customers. We inspect all kinds of packages, from the more classic gull wing packages, to the BGA packages, all the way to the newest leadless packages. We’re quite flexible from that point of view. Product-wise, we have three product lines. Two of them are OEM products, meaning we sell them to other equipment manufacturers who integrate our products in the equipment they develop and sell to the semiconductor back-end market. Typically, our OEM products are used upstream from the final outgoing inspection where we have our third product line, the stand-alone equipment. In the OEM we have two levels - the board level and the system level. The board level is a lower-cost product which requires more integration work from the OEM customer at the start, while the system level is more for smaller volume and is easier to integrate; so the system level is a complete vision inspection unit including the board-level integrated with a PC, camera’s and software. Basically they’re both OEM products. The third product line is the stand-alone machines. Within the stand-alone product group, we have different types of products for different types of components, and that’s based on the way components are handled inside the factory. We are the market leader for the tray-based components, which are typically the highest value components, the larger components, and also the more sophisticated components like the CSPs, the BGAs and some leadless types. We recently introduced the G-10, which is what I call a “middle-sized package,” the two-sided gull wing and J-lead packages that are handled in tubes. Then we have some specialty equipment for bumped wafer inspection, flex-tape inspection and things like that. So, that’s on the product side.

TWST: What are the advantages that ICOS brings to the market? What enables you to have a market leading position?

Mr. DeProft: Let me say that we were last in this market. We moved from number 3 or 4 to the top with better than 50% market share at this point, because our technology has two merits to it. First of all, it’s cost effective. Our gross margins are consistently higher than that of the competition because the technology base that we use is more cost effective. Secondly, the technology is also more flexible. We have seen over these last few years that there is a lot of change in packages. Over the last five years, we transitioned from the classical generation of packages, to the BGA and CSP, packages with balls as contacts, and then to the leedless. So that’s three major generations. Since they’re different components, they have different requirements as far as inspection is concerned and our technology has proven to be much more flexible to do the different inspections on the different components. So on the product side, it’s a combination of cost efficiency and flexibility. If you can combine these together, you’re in good shape.

TWST: Looking forward 18, 24 months, what would you like to accomplish?

Mr. DeProft: To strengthen further our position in this whole segment of finishing equipment, inspection and taping equipment: increase market share, and increase the product portfolio into different types of components. We’re market leaders for some components especially in the higher end, but there are also a lot of smaller components, for instance. We believe there’s quite a bit of growth potential for us right there. We also just got market leadership this year, and I think it’s now up to us to prove that we’re worth it and to consolidate this position. We also believe that the market segment of finishing equipment, we can still grow the company substantially from here.