CMC Materials, Inc. operates as a global supplier of consumable materials to semiconductor manufacturers and pipeline companies.
Segments
The company operates through two segments, Electronic Materials and Performance Materials.
Electronic Materials segment
This segment consists of the company’s chemical mechanical planarization (CMP) slurries, CMP pads, electronic chemicals, and materials technologies businesses. These businesses supply consumable products used in integrated circuit (IC) de...
CMC Materials, Inc. operates as a global supplier of consumable materials to semiconductor manufacturers and pipeline companies.
Segments
The company operates through two segments, Electronic Materials and Performance Materials.
Electronic Materials segment
This segment consists of the company’s chemical mechanical planarization (CMP) slurries, CMP pads, electronic chemicals, and materials technologies businesses. These businesses supply consumable products used in integrated circuit (IC) device manufacturing and other aspects of the semiconductor and data storage industries.
IC devices, or ‘chips’, are components in a wide range of electronic systems for computing, communications, manufacturing and transportation. The multi-step manufacturing process for IC devices typically begins with a circular wafer of pure silicon, which then undergoes a process of alternating insulating and conducting layers until the desired wiring within the IC device is achieved. At the conclusion of the process, the wafer is cut into individual IC devices, which are then packaged to form individual chips. Consumers most frequently encounter IC devices in smart phones and tablets, desktop or laptop computers, automotive applications, gaming devices, and televisions.
CMP Slurries and CMP Pads
The company develops, produces, and sells CMP slurries for polishing a wide range of materials used in IC devices, including tungsten, dielectric materials, copper, tantalum (commonly referred to as ‘barrier’), and aluminum, and for polishing bare silicon wafers, as well as disk substrates and magnetic heads used in hard disk drives. The company also develops, manufactures, and sells CMP polishing pads, which are used in conjunction with slurries in the CMP process. The company’s CMP pads can be used on a variety of polishing tools and wafers, over a range of technology nodes and applications, including tungsten, copper, and dielectrics.
CMP slurries and pads (CMP consumables) are used to remove excess material that is deposited during the IC manufacturing process and to level and smooth the surfaces of the layers of IC devices via a combination of chemical reactions and mechanical abrasion, leaving minimal residue and defects on the surface, with only the material necessary for circuit integrity remaining. CMP enables IC device manufacturers to produce smaller, faster, and more complex IC with a greater density of transistors. CMP also helps reduce the number of defective or substandard IC devices, which increases the device yield. An effective CMP process is achieved through technical optimization of the CMP consumables in conjunction with an appropriately designed CMP process and generally requires slurries and pads to be qualified in its processes through an extensive series of tests and evaluations.
Electronic Chemicals
In the company’s electronic chemicals business, it offers semiconductor-grade wet chemicals with purities that extend to the parts-per-trillion (ppt) level. The company produces and sells high-purity process chemicals through the formulation, purification, and blending of acids, solvents, and other wet chemicals primarily used to etch, clean, and dry silicon wafers during the production of semiconductors, photovoltaics (solar cells), and flat panel displays.
The company’s electronic chemicals products include sulfuric, phosphoric, nitric and hydrofluoric acids, ammonium hydroxide, hydrogen peroxide, isopropyl alcohol, other specialty organic solvents and various blends of chemicals. As the IC manufacturing process moves to more advanced technology nodes and the complexity of the process continues to increase, quality and purity of the materials become even more critical to the device yield. Increasing levels of purity and achieving lower levels of variation in the company’s electronic chemicals business are required to enable next-generation IC technologies. The company’s advanced chemical purification technologies, including distillation, ion exchange, gas adsorption, and filtration, are designed to provide consistently low contaminant levels in a variety of high-purity process chemicals. The company continues to work to develop industry-leading metrology and analytical methods to measure the purity levels achieved.
Materials Technologies
In the company’s materials technologies business, which comprises the ITS business, it develops and manufactures high-performance consumable products for cleaning advanced probe cards and test sockets at semiconductor manufacturing facilities. These engineered polymer solutions improve customer yields and throughput in wafer and package test operations at semiconductor device manufacturers, foundries, and outsourced semiconductor assembly and test (OSAT) facilities. The company also designs innovative polymer products for semiconductor fabs that improve front-end tool uptime.
Strategy
The company focuses on building close relationships with its customers. The company collaborates with them to identify and deliver new and improved solutions, to integrate its products into their manufacturing processes, and to assist them with supply, warehouse and inventory management.
The company’s strategy is to secure various sources of different raw materials, as appropriate, to enable the desired performance of its products, and monitor those sources as necessary to provide supply assurance.
Competition
For the company’s electronic chemicals business, there are various competitors with whom it competes in different regions, through both localized production and importation. These competitors include Avantor, BASF, Honeywell, Kanto Corporation and Technic, among others.
Customers, Sales, and Marketing
Within the semiconductor industry, the company’s customers are generally producers of logic or memory IC devices, or providers of IC foundry services. The company markets its products primarily through direct sales to its customers, although the company uses distributors in certain areas, such as in China.
Performance Materials segment
This segment includes the company’s pipeline and industrial materials (PIM), wood treatment, and QED Technologies International, Inc. (QED) businesses. The company is a leading global provider of products, services, and solutions for optimizing pipeline throughput and maximizing performance and safety. Its PIM products include drag-reducing agents (DRAs), valve greases, cleaners and sealants, and related equipment supporting pipeline and adjacent industries. The company also provides routine and emergency maintenance services, as well as training for customers in the pipeline and adjacent industries worldwide. Through QED, its precision optics business, the company serves the precision optics industry with capital equipment, consumables, and services. The company’s subsidiary, KMG-Bernuth, Inc. (KMG-Bernuth), operates the wood treatment business, which manufactures and sells wood treatment preservatives made from pentachlorophenol (penta) for utility poles and crossarms.
PIM Products and Services
The company is a leading global provider of performance products and services to pipeline companies. The company supplies DRAs, valve greases, cleaners and sealants, and related services and equipment, including routine and emergency valve maintenance services and training, to customers in the pipeline and adjacent industries. Its PIM products and services provide value-added specialty products that optimize pipeline efficiency and enhance safety. The company operates facilities for the manufacture, formulation and distribution of its products in the U.S. and Canada. Its PIM products are sold under the brands Flowchem, Sealweld, and Val-Tex.
The company provides polymer-based DRAs for crude oil transmission. It has several product offerings to meet specific customer needs depending on the physical properties of the oil being pumped and various geographic climate conditions. The company’s products provide benefit to its customers by reducing the pressure loss in a pipeline due to turbulent flow within it. This allows pipeline operators to maximize product flow while maintaining safe operating pressure and reducing energy consumption.
The company develops, manufactures, and sells products used for maintaining and extending the operational lifespan of lubricated isolation valves. The company also services valves inline and under pressure through its field services division and provides training to customers in the pipeline and adjacent industries globally.
Wood Treatment
The wood treatment preservatives business supplies penta-based products to industrial customers in the U.S. and Canada who use this preservative to pressure treat utility poles and crossarms to extend their useful life by protecting against insect damage and decay. Penta products include solid blocks, which are manufactured by KMG-Bernuth at its facility in Matamoros, Mexico, and penta concentrate liquid that is processed from penta blocks at KMG-Bernuth’s plant in Tuscaloosa, Alabama. The company is the only manufacturer of penta-based preservatives in North America.
In 2019, the company made a decision to exit the wood treatment business and focus its strategy and future capital investments on its other businesses. The company’s Matamoros, Mexico facility will continue to produce an intermediate product until it ceases operations by the end of December 2021. Its Tuscaloosa, Alabama plant will continue to process and sell to customers this intermediate product, into approximately the second quarter of fiscal year 2022.
QED
QED is a leading provider of deterministic finishing and advanced measurement technology to the precision optics industry. The company designs and produces precision polishing and metrology systems for advanced optics applications that allow customers to attain near-perfect shape and surface finish on a range of optical components, such as mirrors, lenses and prisms. QED’s products also include magneto-rheological polishing fluids, consumables, spare and replacement parts, as well as optical polishing services and other customer support services. The company is applying its technical expertise in polishing techniques to applications in other industries where shaping, enabling, and enhancing the performance of surfaces is critical to success. Precision optics are pervasive, serving several large existing industries, such as semiconductor equipment, aerospace, defense, biomedical, research and digital imaging.
Strategy
The company’s strategy for its Performance Materials segment includes expanding the PIM business, delivering high quality products to its customers, and driving demand for its products.
PIM Products and Services
The company focuses on providing superior customer service to its customers while delivering consistent, high quality DRA products that meet their needs. The company intends to continue to serve customers as they bring new capacity online and to grow its business through attracting and serving new customers. In addition, the company continues to develop other products focused on the pipeline transmission area for which DRAs can serve unmet needs.
Additionally, the company continues to work to drive demand for its products by promoting valve best practices to energy industry operators that align with current and trending global regulations and sustainable practices. The company’s primary focus is the promotion of its critical sealing products as an alternative to more costly mechanical solutions for achieving isolation in aged infrastructure.
QED
The company’s focus for QED is to provide innovative and industry-leading products and services to the precision optics industry. The company continues to drive demand for its products to new and existing customers by developing new equipment and capabilities, pursuing emerging applications, and communicating the unique value offered by its products.
Customers, Sales, and Marketing
PIM Products and Services
The company provides DRAs to several major mid-stream pipeline transmission companies both domestically and internationally. The company has a U.S.-based sales network, a U.S.-based transportation and logistics operations, and a global network of distributors and agents to manage the sales and delivery of its products. For its additional PIM products and services, the company markets and sells to pipeline and adjacent industry customers, such as service companies, and major utility distribution companies via direct sales and channel partners.
Wood Treatment
The company is the only manufacturer of penta-based wood treatment preservatives for utility poles and crossarms in North America and only supplies penta to customers in the U.S. and Canada. The company does not have other products or business in this area.
QED
QED supports customers in the semiconductor equipment, aerospace, defense, research, biomedical, and digital imaging industries. QED counts among its worldwide customers leading precision optics manufacturers, major semiconductor original equipment manufacturers, research institutions, and contractors to the U.S. and other governments.
Intellectual Property
As of October 31, 2021, the company had approximately 1,440 active worldwide patents, of which approximately 280 are U.S. patents, and approximately 350 pending worldwide patent applications, of which approximately 50 are in the U.S.
Acquisitions
In April 2021, the company completed the acquisition of 100% of International Test Solutions, LLC (ITS), which designs and produces high-performance consumables used to optimize critical semiconductor testing processes. This acquisition expands the company’s product offering within the Electronic Materials business segment.
Environmental, Safety and Health and Other Regulatory Matters
The company’s major operations in the U.S., France, Italy, Japan, Singapore, South Korea, Taiwan, and the United Kingdom are certified under current ISO 14001 Environmental and ISO 45001 Safety and Health standards, which require that it implements and operates according to various procedures that demonstrate waste reduction, energy conservation, injury reduction and other environmental, health and safety objectives.
Certain products are subject to the Export Administration Regulations, administered by the U.S. Department of Commerce, Bureau of Industry and Security, which require that the company obtains an export license before it can export certain controlled products or technology to specified countries.
Additionally, some of the company’s QED products are subject to the International Traffic in Arms Regulations, which restrict the export of information and material that may be used for military or intelligence applications by a foreign person. The company is also subject to the import regulations administered by the U.S. Customs and Border Protection, and to the regulations administered by the U.S. Department of the Treasury, Office of Foreign Assets Control, implementing economic sanctions against designated countries, governments, and persons based on the U.S. foreign policy and national security considerations.
History
The company was founded in 1999. It was incorporated in the state of Delaware in 1999. The company was formerly known as Cabot Microelectronics Corporation and changed its name to CMC Materials, Inc. in 2020.
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