And the winner is…


6 Nov 2003

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Manufacturing and technology are two of the market sectors that have been hit hardest by the downturns in the global economy in the last couple of years. So you’d think it would be safe to conclude that a start-up company selling new technology into the semiconductor manufacturing sector would be finding it tough. But that’s exactly the market that Xsil, this year’s Deloitte Fast 50 winner, is selling into and it has recorded an aggregate growth in revenue of 3,064pc over the past three years – almost twice that of its nearest competitor Web Reservations International.

“Looking at our growth, despite a fairly morose market for the semiconductor industry, we’ve been successfully swimming against the stream,” says Jean Luc Laydevant, vice-president of business development with Xsil. “We provide leading-edge technology that is radically new and brings great benefit to our customers.”

Laydevant admits that describing what the company does to someone who doesn’t work in the semiconductor business is a tough job. At their most basic, Xsil’s laser micro-machining systems enable semiconductor manufacturers to get more from their silicon. Manufacturing throughput can be increased, multiple product types and die sizes can be included on the same wafer, smaller size wafer cuts are possible and manufacturers can incorporate chips on both sides of the silicon.

The company was founded in 2000 by serial entrepreneur Peter Conlon, who in March 2001 sold another tech firm, MVT to Agilent Technologies for over €100m in cash. It now sells primarily into the semiconductor, opto-electronic and bio-medical sectors. Based in Dublin’s Trinity Enterprise Centre, Xsil employs 120 people, including 25 PhDs. It works closely with a number of research institutes, universities and laser manufacturers including Trinity College Dublin where some of the research underpinning its technology was carried out.

All very well and good, but how has Xsil managed to grow so quickly during the worst recession to hit the chip sector since the Eighties? “Our technology allows clients to create the next generation products,” says Laydevant. “They use our tool to design the next stage of products and we are selling to the R&D groups, so in that sense it’s downturn proof. If you are Intel you will reduce manufacturing capacity in a downturn but not R&D.” The semiconductor companies are well used to this cycle of booms and busts and spend a massive proportion on their revenues on R&D for future products that will see them through the next boom.

Laydevant stresses that Intel is not an Xsil customer, but other than that he won’t be drawn on any specifics of customers other than to say that of the top 10 semiconductor manufacturers, three are clients and Xsil is actively pursuing the other seven. Chip makers are a notoriously secretive bunch, which means Xsil are not allowed reveal the names of any of its customers. Laydevant cites the case of a recent major player who signed a contract with Xsil, but refused to even allow it to reveal its name in case its competitors were able to gain some intelligence from the announcement.

An example of the next generation of products that Xsil products are being used to create is smart cards. All the manufacturers are trying to create extremely thin smart cards but there are physical limits to how thinly the silicon can be diced using a traditional mechanical saw. Xsil enables smart card manufacturers to cut the wafers using laser technology that can cut at much lower thickness and with less collateral damage than with a mechanical saw.

Xsil expects revenues of €35m this year but it looks like there is plenty of potential for further growth. An average client will spend anywhere between €10m- €40m with Xsil over a four to five-year period. The majority of the current customer base is in the product design phase and Xsil’s recurring revenues will happen as the companies move into volume production. It also has one customer that has moved to volume production, thus further validating its product set.

According to Laydevant about 30pc of revenues come from the US, 30pc from Europe and 40pc from Asia. Not surprisingly, the company established offices very early on in Japan and Taiwan, a move that’s been paid off thanks to its strength in the Asian market.

“The sales cycle is very long – from initial contact to selling the first system takes about 18 months to two years,” says Laydevant. “The customers need to qualify and test the product extensively.”

With all this secrecy and the complex nature of the products, it must be difficult to explain the business to people outside the industry? “When people ask me, I just say I work in computers,” Laydevant concludes with a laugh.

By John Collins

Pictured from left: Jean Luc Laydevant, vice-president of business development, Xsil Technologies, David O’Flanagan, partner, Deloitte and Brian Farrell, vice-president and founder, Xsil Technologies