The Times 100 : The Best Performing Companies in California : THE FAST TRACK : Trying to Make the Big Leagues : An acquisition with IBM’s help may allow Silicon Valley Group to become a major supplier of chip manufacturing equipment.
The Silicon Valley Group is not one of those overnight corporate successes that seem to overflow within the San Jose ZIP code. It only looks that way.
Last year, after more than a decade of relative obscurity and modest sales, the small maker of semiconductor manufacturing equipment burst into the national spotlight on the news that IBM, among others, had agreed to help it buy a technology company that had been much sought after by the Japanese.
Silicon Valley Group’s purchase of the optical lithography division of Perkin-Elmer is scheduled to become final shortly, and when it is, the company will be one of the world’s major suppliers of semiconductor manufacturing equipment.
The purchase will, of course, cause the company’s sales to make another remarkable jump--repeating the performance of the past two years, when its revenue grew annually by an average of 82.6% to $131.1 million at the end of its 1989 fiscal year last September. The accomplishment earned the company the No. 5 spot on The Growth 100, which ranks the fastest-growing companies in California.
But the deal will also thrust SVG into the middle of one of the most promising new semiconductor-making technologies. Perhaps more important, it will assume a leading role in a business increasingly recognized as critical to maintaining the competitive edge of the nation’s entire electronics industry.
“The deal is a strategic play for us,” said Papken S. DerTorossian, the company’s 51-year-old president and chief executive. “This will help us become a world-class player.”
This is not the first time DerTorossian, an MIT-trained engineer, has gone after a strategic acquisition to expand his company. In 1988, the company more than doubled its size by buying Thermco Systems Inc. in Orange, a maker of furnaces used in computer chip production.
Founded in 1977 and a public company since 1983, SVG has been on a fast growth curve for three years, a period that coincides with increasing Japanese dominance of the market for advanced semiconductor manufacturing equipment.
Despite the tough foreign competition, DerTorossian, a native of Turkey who has been at the helm of SVG since 1984, says he is determined to put up the best fight possible on behalf of the U.S. semiconductor industry. To that extent he has become active in international trade and competitiveness issues and is the chairman of the American Electronics Assn.’s International Public Affairs Steering Committee.
His extracurricular activities apparently served the company well, because several of his contacts have reportedly agreed to help SVG purchase the Perkin-Elmer optical lithography business. Some, such as IBM, are making a direct investment in the company; others have made purchase commitments.
Clearly DerTorossian feels that SVG is finally moving into the big leagues of the industry. “If you want to be successful, you have to choose your friends well,” DerTorossian said of his new partners. “You can’t fight a war with sticks. You gotta have some guns.”
