Interview With The Chairman, President And CEO: Cabot Microelectronics Corporation (CCMP) - William P. Noglows
December 22, 2011 - The Wall Street Transcript has just published Semiconductors Report offering a timely review of the sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
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William P. Noglows has served as Chairman, President and Chief Executive Officer at Cabot Microelectronics Corporation since November 2003. He previously had served as a Director of Cabot Microelectronics from January 2000 to April 2002. Before joining Cabot Microelectronics, Mr. Noglows served as an Executive Vice President of Cabot Corporation from 1998 to 2003. He received his B.S. in chemical engineering from the Georgia Institute of Technology. Mr. Noglows is also a Director of Littelfuse, Inc., and Aspen Aerogels, Inc.
TWST: Let's start with a quick corporate profile of Cabot Microelectronics Corporation and its core business.
Mr. Noglows: Our core business is chemical mechanical planarization, consumables products and technology. I will use the term CMP going forward instead of chemical mechanical planarization. The CMP process is an enabling process for the semiconductor industry that has helped maintain the progression of Moore's law. CMP essentially enables the photolithography process to help the industry continue to shrink features and drive down node sizes on the trajectory down Moore's law. Approximately 90 % of our business is CMP consumables based. We are the leading supplier of CMP slurries and a growing supplier of CMP pads. The other 10 % of our business is related to polishing high-precision optics, slurries that we sell into the rigid disk storage industry and which we refer to as our data storage business, and an emerging opportunity in prime wafer-polishing slurries. We essentially supply CMP consumables to every semiconductor manufacturer in the world. We have a very broad and deep product portfolio as well as a very deep and broad customer base, which gives us the visibility and experience in learning across the industry and across the different technologies.
TWST: Cabot Microelectronics has an illustrious history. Would you recap briefly some of the key milestones over the years?
Mr. Noglows: We went public in the year 2000. We were a spinoff of Cabot Corporation, which is a fairly large industrial chemical company. Since then, we have grown very rapidly and expanded our presence around the world. If you followed the semiconductor industry in the early 1990s, it started in the United States, so we opened our first research and development and manufacturing facility here in Chicago to be close to our largest raw materials supplier, which is located in southern Illinois, and to supply our customers in the U.S. We then followed the industry to Japan with the investment in our facility in Geino, Japan, which is now our largest manufacturing facility and which also includes a research laboratory. Then the industry expanded to Taiwan and South Korea. We were quick, I think, to recognize the emerging importance of the foundry industry, which resulted in our significant presence in Taiwan. We have an office and research laboratory in Hsinchu. We have a small pad facility in Tainan, which is embedded within the site of our largest customer, TSMC. Near the end of 2008, we acquired one of our competitors, Epoch Material Co., Ltd., in southern Taiwan.
This facility, located in Kaohsiung, allowed us to expand our research, development and manufacturing capabilities in Taiwan.In August of 2011, we opened our newest research, development and manufacturing facility in South Korea to help enable real-time collaboration with our memory customers. We have been able to grow very quickly. We have entered the pad market and have achieved what we believe is a meaningful share of this business in the last three years. We believe we are about 5% to 7% of the total CMP pad market with the incumbent supplier being about 85%. So we think we have had pretty good success so far, and we believe we are well positioned for growth into the future. Responding to industry trends and demands is challenging, and as a result, we continue to evolve and strategically reposition our businesses. For example, during 2006, we transferred our data storage business to Singapore to be closer to our customers. We have been able to maintain our supply positions, and we feel pretty good about our business.
TWST: The company recently opened a new research, development and manufacturing facility in Gyeonggi Province, South Korea. Would you tell us about the new facility and recap where the other facilities are located?
Mr. Noglows: Let me talk about Gyeonggi first. Two of our larger memory customers are located in South Korea and the memory segment is becoming more and more important. For instance, the tablet computers that are so popular now, if you crack one of those things open, they are full of memory and memory chips and customers like Samsung and Hynix are benefiting from the very rapid growth and acceptance of these very exciting new devices. Our intent in South Korea is similar to the intent we had in Taiwan when we started to see the emerging importance of the foundry segment and we quickly invested in Taiwan. Now, we are doing the same thing in South Korea. We have always had a strong sales presence in South Korea. We just did not have a research and development laboratory or manufacturing footprint until recently.
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