Company Profile: FEI Company provides tools for nanotechnology

By Cheryl Coupé, freelance technology writer, Scribo

(Based on an interview between Carrie Bugbee and David Narum, FEI CTO)

FEI's tools for nanotech bring the nanoscale within the reach of researchers, product developers and advanced process control engineers. The company provides focused ion beam (FIB) systems and scanning and transmission electron microscopes (SEMs/TEMs). It is also the pioneer in DualBeam™ systems that feature FIB and SEM columns integrated into a single system. These systems combine the power of focused ion beam and scanning electron microscope technologies to enable cross sectioning and high-resolution imaging of sub-surface structures, as well as manipulation of samples and the creation of nanoscale structures. These tools help FEI’s customers innovate in many diverse markets, including nanobiology, data storage, semiconductors and materials science. FEI's world headquarters campus is located in Hillsboro, Oregon.

SAO Industry Update:

FEI is a native Oregon tech company—tell us about the company’s history.

David Narum:

FEI was founded in Oregon in 1971 as a research company to develop and provide high-purity, single crystal materials for field emission research. By 1981, FEI had developed liquid metal ion (LMI) sources and a year later FEI shipped its first LMI focusing column. In 1983, the company introduced its first electrostatically focused electron column. Finally, in 1989, FEI shipped its first complete focused ion beam (FIB) workstation.

Today, our products are built around finely focused beams of electrons and ions that are used for a variety of purposes such as very high magnification imaging—even below one Angstrom—and very small, nanoscale manufacturing processes.

The instrument components that create these beams are analogous to an optical microscope. They form finely focused electron or ion columns that are directed to a sample. By finely focused, we mean a beam that ranges from less than one-tenth of a nanometer to 10 nanometers. People might be familiar with Intel locally developing state-of-the-art semiconductor manufacturing processes with features that are on the order of 65 nanometers, so the working resolution of FEI’s tools is 10-100 times smaller than what Intel is putting on a microprocessor chip today. Our focused ion beam workstations can also act as “atomic sandblasters,” to etch or deposit materials at nanoscale geometries.

FEI pioneered the world’s first DualBeam^TM system, combining the power of focused ion beam and scanning electron microscope technologies, ten years before any of its competitors. Our DualBeam products have 3-dimensional imaging, analytical and metrology applications across many industries—including semiconductors, MEMS, data storage (hard disk drive) and general research. In materials science, for example, they can be used to cut into alloys to look at microscopic grain structure three-dimensionally. It also provides micro- or nanosurgery applications. We refer to these applications as nanoprototyping or nanomachining.

SAO:

Tell us about your nanotech tools today, and how they’re used. Can you give us some examples?

DN:

One popular application in the semiconductor market is circuit edit—Intel, in fact, was one of our very early customers in the systems business. Users can use our FIB systems to edit or reroute the multi-layered circuitry in a semiconductor prototype. If they find a mistake in the debugging process of a new design, they can go in and cut electrical lines, deposit new ones, etc. while they’re proving functionality. Once they rework a prototype, they can freeze the design without having to re-fabricate new wafers. This capability saves chip manufacturers months of time and reduces development costs.

In semiconductor and data storage applications, users can cut into the wafers to do statistical analysis and measurement of the structures below the wafer surface in the fab environment. It’s useful in maintaining process control in manufacturing lines. Because of the scale of today’s advanced devices, the dimensions of the structures that they’re monitoring are extremely critical to the performance of the device.

Our systems are also used for defect analysis of semiconductor wafers using a similar process. Customers can detect and characterize particle defects and ultimately eliminate the source of particulate contaminants.

Today, our tools can be used to image biological samples such as cells, proteins and viruses and create 3D reproductions of their complete internal and external structure. Thus the nanobiology sector is an important growth area for our business. Cancer research is a rapidly growing application as is pharmaceutical development, which can use nanoparticle-based drug delivery technologies.

Other interesting applications serve highly focused markets such as forensics for studying gun-shot powder residue and crime scene samples, and advanced minerals analysis techniques that help mining companies best identify geographic areas containing higher yields.

In short, as all advanced research and development, and ultimately manufacturing, moves rapidly towards the nanoscale, we have solutions for all three areas.

SAO:

Your business changed in the late ’90s. Tell us about that.

DN:

In 1997, we merged with Philips Electron Optics, a division of the Philips Corporation. This was a reverse acquisition—we were the controlling company but Philips maintained a 51-percent shareholder stake. That was an interesting strategy for Phillips, which was spinning off non-core businesses at the time. We still have a Philips exec on our board of directors today.

Until ’97, FEI and Philips were closely aligned strategic partners—we jointly created DualBeam systems in the early ’90s using our FIB technology and their market-leading electron microscopy systems. With the merger, we got a final piece of technology in place—the transmission electron microscope, or TEM. In a sense, this type of system works something like familiar medical X-ray imaging: High energy electrons are directed toward a thin sample with one or more electron detectors off the backside. Spatial variations in the sample structure create contrast in the electrons which pass through the sample, yielding very high resolution imaging.

There are again, a wide variety of applications. By way of a couple interesting examples, TEMs played a pivotal role in mapping the human genome and now it’s on to proteomics, which studies the structure and behavior of proteins and cellular structures. Proteins are the body’s messengers for DNA.

SAO:

How has the company’s history affected the direction of your business today?

DN:

We’ve been enabling nanotechnology for three decades, long before everyone else realized we would need to be there.

What is key today is that with all of that history and technology behind us, we now allow customers in a wide variety of industries to image, characterize and manipulate materials and structures on the nanoscale. We deliver enabling tools for all those folks using our technologies.

Recently, we’ve shifted our internal structure to focus on nanobiology, nanoelectronics (data storage and semiconductor), and nanoresearch and industry to enhance our customer focus and deliver the precise solutions they require. We serve a global market with our revenues balanced across the world.

The nanoresearch market includes everything from academic to government to microscopy centers, which focus on the practice of using a microscope to research everything from fuel catalysts, life science, proteomics and advanced semiconductors. Just this week we announced our association with the Russian Federation and its new Center of Excellence for Nanotechnology in Moscow. It is part of President Putin’s recently-announced commitment to growing Russia’s nano-based infrastructure.

As one of the world’s leading providers of tools for nanotech, we’re the Levi Strauss of nanotechnology. There’s a story that says that the tool makers made a lot more money in the gold rush than the gold miners. We like to think of ourselves as delivering the picks and shovels of the nanotechnology era.

SAO:

Wow, you really address diverse markets. How is your business responding?

DN:

Yes, it is incredibly diverse.

We certainly see one of our unique corporate strengths or values in the incredible breadth of our market opportunity. At one time, because of our history, we were strongly perceived to be a semiconductor equipment company and we are working to diffuse that narrow perception. When we introduced our “Tools for Nanotech” branding two years ago, we started building understanding that the common denominator is that we work on the nanoscale.

That growth and diversity has helped because the semiconductor market is cyclical, whereas research is steadier year over year, and we believe that nanobiology and nano-industry hold a wealth of emerging opportunities for FEI. And it seems to be working for us. Revenue in ’97 was $197 million, post merger. Today, we’re at nearly $450 million in revenue.

SAO:

And how many employees now?

DN:

We have approximately 1700 employees worldwide, with sales and service in more than 50 countries. Here in Oregon we employ just over 350. Worldwide our R&D staff is about 370.

SAO:

What have been some of your strategies for shifting customer perceptions?

Focusing on where and how we add value in each of our markets.

Some people are expecting nanotechnology to be an industry or a THING, but nanotech isn’t a thing, it’s a dimensional regime in which much of the most advanced research and product technology is taking place. The key is that engineering materials or understanding chemical and biochemical processes at this dimensional scale is breeding an entirely new body of knowledge and opportunities that truly span a broad spectrum of industries and technical disciplines.

We chose to emphasize this point through the launch of our branding effort two years ago to provide consistent messaging to all our customers. We also got involved with key government organizations and nano trade associations such as Cientifica in Europe and the US-based NanoBusiness alliance.

The result is, we emerged as a US and global leader in nano-enabling tools.

SAO:

So branding was the key to your success?

DN:

It’s important to emphasize that it’s much more than just a marketing campaign. It’s more that our customers realize that they’re interfacing with us in a much different way.

We restructured from a product-oriented company to a market-oriented company, to improve our focus on understanding and satisfying critical customer needs. For example, a customer in semiconductors may have previously bought products from three or four different business units at FEI. We had identified extreme instances where we had our own people competing for business, as each proposed a solution based on different FEI products. Today, FEI provides a unified, single face to each customer, based upon the market in which they reside, allowing FEI to partner with the customer in creating an optimal solution to any particular need. This was a very operational and tangible shift and the customer sees that in the way he or she interfaces with the company.

SAO:

What brought about the shift?

DN:

Historically we asked, where do we succeed in business? It was where we had customer intimacy. We’ve had long and successful relationships with our customers, and where it’s a two-way process in developing products to meet customers’ needs we recognized that we both win.

Another motivating factor was the accelerating pursuit of nanotech in a broad set of industries. This left us with the sense that there were emerging opportunities that extended beyond our traditional customer base, but we needed to educate ourselves on the needs of those emerging markets, and had to educate those markets about what we could do for them. To do that successfully, we had to make sure that we had in-house market experts who could engage with those customers.

A dramatic example includes strongly emerging opportunities within the nanobiology market. Nanobiology is the newest area for us and has a lot of growth potential both in pharmaceutical development and research as well as diagnostics. For example, the first SARS virus was identified in Hong Kong by an FEI electron microscope. Maybe five years ago, we didn’t know but a handful of biologists. We’re now staffing a marketing group with experts in biology and pharmacology.

There’s a similar phenomenon in industrial process control applications, in markets such as automotive, advanced petrochemicals and composite materials, where we have to understand those emerging needs.

SAO:

Tell us about where you see nanotech going. What are some key trends?

DN:

We keep coming back to the emerging opportunities for commercialization based on the ever-shrinking world of technology. We’ve been doing nanotech for three decades. Now the world of engineered materials and products are scaling into the dimensional regime that is at the heart of FEI’s capabilities.

As we touched upon earlier, the potential of nanotech was seen as an economic development tool by Europe, the US and Japan. Now it is better understood as the scale at which all new products, development research and manufacturing need to take place. It’s critical to remaining competitive in the global economy. As a result of that, we’ve really seen investment heat up.

In recent years, government investment in nanotechnology has been measured primarily in terms of Europe, North America and Japan. Now we are seeing government funded sales into countries like Brazil, Russia, India and China. These are now commonly known as the BRIC countries.

According to Lux research, global government investment in nanotechnology will reach $5 billion this year. Private investment by corporations will outpace that for the first time ever at nearly $6 billion this year.

SAO:

What are the drivers for your growth?

DN:

Engineered materials, structural biology and proteomics, protein based pharmaceuticals and industrial process control segments are all seen as emerging markets. We also continue to see additional opportunity in our traditional markets, like semiconductors, from the on-going drive toward smaller and smaller dimensions.

With nanobiology, the drivers are two-fold. One follows from the human genome project. With knowledge gained about the structure of DNA, coupled with gains in knowledge of cellular biology, research is poised to move beyond the question of how does the body work at the cellular level to how do the cells work as protein machines. This is fundamental to understanding many diseases and how to treat them. The shift of cellular biology to the study of proteins and DNA creates the need for imaging and analysis at the dimensional scale unique to the type of tools that we make. R&D magazine identified nanobiotechnology as one of the key enablers to support a $1 trillion industry by 2015.

SAO:

Tell us about your role as a nanotech tool provider based in Oregon.

DN:

As examples: We actively collaborate with many of the local universities by way of research activity, and we support ONAMI with issues related to government funding. HP Corvallis is a major customer of ours, as is Intel and other local semiconductor manufacturers. We’ve had recent interactions with some of the cancer research groups at OHSU.

As an Oregon employer, we have needs for both highly specialized technologists as well as general practitioners of all of the major engineering disciplines: software engineering, electrical engineering, mechanical engineering, applications specialists in all of our target industries. We’re a broad spectrum company.

Cheryl Coupé has been writing and editing for Northwest technology companies since 1989. Her experience ranges from software to semiconductors; embedded computers to test & measurement; display technologies to health care software & hardware. She has held communications and technical positions within corporations (Intel, Applied Microsystems and RadiSys), as well as agencies (MKTX and Waggener Edstrom). She is also the editor-in-chief of the SAO’s Industry Update. For more information, see www.scribo.net.