SMT & Inspection |
How did the economic crisis affect Vi TECHNOLOGY? We certainly did not expect to have such a crisis on our hands. We first noticed it in 2008, September 2008 to be precise. Actually, 2008 was a record year for us. We sold a lot of machines; we even had to turn down customers, because we were not able to produce everything. In September, we started to notice that the order backlog stopped to be filled and we had to experience a very tough Q4/2008. The 1Q/2009 was still difficult, but little by little we started to recover our business activities. We are not at the same level as we were in 2008 – that is for sure – but the situation has improved and our expectations we actually exceeded. To what do you attribute this ‘better than expected’ result? This development is mainly due to the fact that Vi TECHNOLOGY has been moving away from only serving multi-national customers. We were serving only the big companies in Europe, the US and in Asia – here mainly the big, multi-national EMS-companies in China. Now we have been able to win national companies in China too. I believe that we have been very successful in our new strategy. Looking at our business activities now – it is almost the end of 2009 – around 70% of all our customers are smaller companies, national companies on a smaller scale. However, I have also to point out, that we already started to implement this new strategy before the financial crisis threw everything into turmoil. We wanted to get away from a purely multi-national customer base to a more diversified customer portfolio. Besides attracting a new type of customer, we also tried to serve new industry segments too. Before, we were serving mainly the automotive industry, the industrial industry as well as the consumer electronics industry, but not so much the segments Infrastructure and Computer. The new equipment was especially developed to address these last two industry segments. The crisis basically forced us to look at and address these new markets. The end result is not as bad as one would have expected. How big a share has each of these segments in the overall inspection market and for Vi TECHNOLOGY? I will try and make it very simple. In a normal market condition, Automotive would be 25% of the overall inspection market, Infrastructure, Computer and Consumer would also be each 25%. That means that we were only serving 50% of the entire market. Now we’re actually able to serve 100% of the market. If I am looking at the market today, Telecom / Infrastructure and Computer basically stand of 50% of our sales. It has changed a lot – and as you might well know – the automotive industry was virtually down. We sold almost nothing in the automotive industry. We were able to secure a little business in the Industrial segment and – comparably – quite a lot in the segments Consumer Electronics, Infrastructure and Computer. This has certainly adapted our portfolio here at Vi TECHNOLOGY. What I am now expecting to see is the following: sometime in 2010 we will definitely emerge from this crisis, but I cannot predict when. The important thing for us is that we did not lose our traditional customers. We are still there to serve the market segments which made us strong. But as we have expanded into new segments, we will become even stronger. Quite a number of companies have decided to exit the AOI market. Did you see any particular benefits coming from those decisions? The reality is quite different. No company has actually left the segment, if you so will. Orbotech has now become Orpro Vision; Agilent has moved to become Vitox for the Asian market. Their business has just been moved around, but it has not left the market as such. For us, this means the competitors are still there. The overall market is quite small. The AOI-Market is in general a pure niche market, about $300 - $400 million in a normal market condition. There are around 25 players in this particular market. The interesting question is – how can everybody survive? Vi TECHNOLOGY is the second or third biggest in the market I believe, with a market share of less than 10%. The market leader is in the range of 10 – 11%. As you can see, the market is very fragmented and I am pretty sure that a lot of people have been losing plenty of money this year. Unfortunately, so far there has been no market consolidation and we were not able to secure a bigger chunk of the market. Speaking of the market as such; what expectations do you have for Productronica? We only attend a few such events; Productronica, Apex, Nepcon and Semicon Taiwan. If we would have a booth on all available events, we would not have time to do our work. This is a good opportunity to meet a lot of people in the space of just a few days. Our sales teams would need months to meet all these people in a different setting. Then we certainly work on the company’s image and reputation. We present ourselves and our machines here; we promote our knowledge and know-how. We show who we are and what we want to be in the future, if you so will. New customers are also coming, but only represent a very small part of our work here. The focus is clearly on our existing customers. Around 80% of all people that we meet and talk to are existing customers, to be precise. We certainly did not expect to see so many people. We were expecting just a few. But we feel that a nice spirit of optimism has arrived. We have seen a lot of customers already and we have only been here for 2 days. Frankly speaking we do not really understand, but it is a very good indication for the market. How much time and effort do you invest in Services for your machines? From a sales point of view and if I can make a joke, then our machines definitely last far too long. If I look at the question with customer satisfaction in mind, then I believe it is the right number of years. We have about 1500 Vi TECHNOLOGY machines, which are installed around the world. Some customers have machines that are 8 – 9 years old and they still work like a charm. Customers are happy with our products and that is certainly good news for us. They will not go through a time consuming evaluation process when buying a new machine. Those customers will come directly to us. However, we also want to keep our competitiveness. As I said before, many customers bought a machine quite a few years back – with software and a specific type of camera. When we develop new software or a new camera, we make sure that all of that is compatible with our older products. Customers can therefore easily upgrade their equipment without having to invest into an entirely new system. And we also just received the Frost & Sullivan Award for Customer Value Enhancement; an award given to us by customers. Where do you see the innovative strength of Vi TECHNOLOGY? I don’t want to give out any specific ideas that we are currently working on here at Vi TECHNOLOGY. We have a team of engineers that work on innovations for our equipment. R&D is organised around creating new value or new types of machines. We even have partnerships with laboratories in France and other European countries which contribute to the development of new equipment. To be more specific; around 40% of our resources we invest in R&D. Here I am talking about pure R&D; not marketing, etc. We are able to invest so much into R&D, because we have structured our sales team really well. We have distribution partners around the world, but also operate our own small sales team. The network of distributors is however huge, compared to our own sales force. If we would do this all by ourselves, the above figure would certainly look different. What is essential to AOI? You need to have a good camera – to capture the best images possible – and the right signal processing to follow this. Here we invest our energy, money and other R&D resources. It is not our job to manufacture mechanical parts. Thank you for the interview.
Vi TECHNOLOGY diversified portfolio
Jean- Yves Gomez, CEO of France-based equipment maker Vi TECHNOLOGY, has talked to us about entering new market segments and how the company managed the economic downturn.
How did the economic crisis affect Vi TECHNOLOGY? We certainly did not expect to have such a crisis on our hands. We first noticed it in 2008, September 2008 to be precise. Actually, 2008 was a record year for us. We sold a lot of machines; we even had to turn down customers, because we were not able to produce everything. In September, we started to notice that the order backlog stopped to be filled and we had to experience a very tough Q4/2008. The 1Q/2009 was still difficult, but little by little we started to recover our business activities. We are not at the same level as we were in 2008 – that is for sure – but the situation has improved and our expectations we actually exceeded. To what do you attribute this ‘better than expected’ result? This development is mainly due to the fact that Vi TECHNOLOGY has been moving away from only serving multi-national customers. We were serving only the big companies in Europe, the US and in Asia – here mainly the big, multi-national EMS-companies in China. Now we have been able to win national companies in China too. I believe that we have been very successful in our new strategy. Looking at our business activities now – it is almost the end of 2009 – around 70% of all our customers are smaller companies, national companies on a smaller scale. However, I have also to point out, that we already started to implement this new strategy before the financial crisis threw everything into turmoil. We wanted to get away from a purely multi-national customer base to a more diversified customer portfolio. Besides attracting a new type of customer, we also tried to serve new industry segments too. Before, we were serving mainly the automotive industry, the industrial industry as well as the consumer electronics industry, but not so much the segments Infrastructure and Computer. The new equipment was especially developed to address these last two industry segments. The crisis basically forced us to look at and address these new markets. The end result is not as bad as one would have expected. How big a share has each of these segments in the overall inspection market and for Vi TECHNOLOGY? I will try and make it very simple. In a normal market condition, Automotive would be 25% of the overall inspection market, Infrastructure, Computer and Consumer would also be each 25%. That means that we were only serving 50% of the entire market. Now we’re actually able to serve 100% of the market. If I am looking at the market today, Telecom / Infrastructure and Computer basically stand of 50% of our sales. It has changed a lot – and as you might well know – the automotive industry was virtually down. We sold almost nothing in the automotive industry. We were able to secure a little business in the Industrial segment and – comparably – quite a lot in the segments Consumer Electronics, Infrastructure and Computer. This has certainly adapted our portfolio here at Vi TECHNOLOGY. What I am now expecting to see is the following: sometime in 2010 we will definitely emerge from this crisis, but I cannot predict when. The important thing for us is that we did not lose our traditional customers. We are still there to serve the market segments which made us strong. But as we have expanded into new segments, we will become even stronger. Quite a number of companies have decided to exit the AOI market. Did you see any particular benefits coming from those decisions? The reality is quite different. No company has actually left the segment, if you so will. Orbotech has now become Orpro Vision; Agilent has moved to become Vitox for the Asian market. Their business has just been moved around, but it has not left the market as such. For us, this means the competitors are still there. The overall market is quite small. The AOI-Market is in general a pure niche market, about $300 - $400 million in a normal market condition. There are around 25 players in this particular market. The interesting question is – how can everybody survive? Vi TECHNOLOGY is the second or third biggest in the market I believe, with a market share of less than 10%. The market leader is in the range of 10 – 11%. As you can see, the market is very fragmented and I am pretty sure that a lot of people have been losing plenty of money this year. Unfortunately, so far there has been no market consolidation and we were not able to secure a bigger chunk of the market. Speaking of the market as such; what expectations do you have for Productronica? We only attend a few such events; Productronica, Apex, Nepcon and Semicon Taiwan. If we would have a booth on all available events, we would not have time to do our work. This is a good opportunity to meet a lot of people in the space of just a few days. Our sales teams would need months to meet all these people in a different setting. Then we certainly work on the company’s image and reputation. We present ourselves and our machines here; we promote our knowledge and know-how. We show who we are and what we want to be in the future, if you so will. New customers are also coming, but only represent a very small part of our work here. The focus is clearly on our existing customers. Around 80% of all people that we meet and talk to are existing customers, to be precise. We certainly did not expect to see so many people. We were expecting just a few. But we feel that a nice spirit of optimism has arrived. We have seen a lot of customers already and we have only been here for 2 days. Frankly speaking we do not really understand, but it is a very good indication for the market. How much time and effort do you invest in Services for your machines? From a sales point of view and if I can make a joke, then our machines definitely last far too long. If I look at the question with customer satisfaction in mind, then I believe it is the right number of years. We have about 1500 Vi TECHNOLOGY machines, which are installed around the world. Some customers have machines that are 8 – 9 years old and they still work like a charm. Customers are happy with our products and that is certainly good news for us. They will not go through a time consuming evaluation process when buying a new machine. Those customers will come directly to us. However, we also want to keep our competitiveness. As I said before, many customers bought a machine quite a few years back – with software and a specific type of camera. When we develop new software or a new camera, we make sure that all of that is compatible with our older products. Customers can therefore easily upgrade their equipment without having to invest into an entirely new system. And we also just received the Frost & Sullivan Award for Customer Value Enhancement; an award given to us by customers. Where do you see the innovative strength of Vi TECHNOLOGY? I don’t want to give out any specific ideas that we are currently working on here at Vi TECHNOLOGY. We have a team of engineers that work on innovations for our equipment. R&D is organised around creating new value or new types of machines. We even have partnerships with laboratories in France and other European countries which contribute to the development of new equipment. To be more specific; around 40% of our resources we invest in R&D. Here I am talking about pure R&D; not marketing, etc. We are able to invest so much into R&D, because we have structured our sales team really well. We have distribution partners around the world, but also operate our own small sales team. The network of distributors is however huge, compared to our own sales force. If we would do this all by ourselves, the above figure would certainly look different. What is essential to AOI? You need to have a good camera – to capture the best images possible – and the right signal processing to follow this. Here we invest our energy, money and other R&D resources. It is not our job to manufacture mechanical parts. Thank you for the interview.
