Semitool Taps Into New Energy Market

By Beacon Staff

Semitool, Inc., which in January laid off 200 people in its Kalispell and Libby plants due to lagging customer orders, is poised to make a solid comeback. Along with experiencing an increase in third-quarter revenue, the Kalispell-based company recently inked a partnership with a new local business, Zinc Air.

The two companies saw an opportunity in their combined expertise and teamed up to develop flow batteries intended to provide back-up power for renewable energy operations such as solar and wind.

“The technology Zinc Air brought in concept to Semitool matches our experience but in different markets,” Kevin Witt, Semitool’s director of disruptive technology, said. “The principles we use are identical for what Zinc Air is looking for in the energy sector. Our operating principles are the same. What attracted us to them is the fact that it is a natural extension of some technology we’ve been working with.”

Semitool produces silicon plates, also called wafers, that hold computer chips. The company has about 700 workers in the Flathead Valley and is the third-largest employer in the county.

Last November, the company laid off nearly 100 employees in Kalispell and Libby, which affected nearly 40 percent of its Montana workforce. Semitool then shut down from Dec. 15 through Jan. 5 and workers were told to anticipate more layoffs in the first week of January.

Economic conditions and cancellations of customer orders were cited as reasons for the company’s workforce reduction and time off.

January and February were dismal months for Semitool, according to president and chief operating officer Larry Murphy, but he said orders began to pick up in March and have remained at a steady pace ever since.

He cited the increasing demand for more power in portable computing devices – one of the key markets the company serves – like iPhones, as one of the reasons for the revenue spike. Semitool also recently transitioned from using aluminum to copper in trying to keep up with the demand for smaller computer chips.

Murphy said the company brought in additional business with its year-long pursuit into the solar market, and the venture into energy-storing redox batteries with Zinc Air is a part of that.

With five employees, Zinc Air solely focuses on the development of energy storage devices. The two companies began discussions six months ago.

“When you’re starting a battery company, you don’t expect to come across someone with the technical expertise and proficiency in what we were looking for in electrochemical,” Craig Wilkins, vice president of Zinc Air, said. “It’s the right fit.”

Flow batteries are charged by the flow or circulation of chemicals, and this technology makes them viable for large-scale operations.

“The principal they work on is electrochemistry,” Witt said. “The big secret is what the chemistry is and how you use it.”

He said this type of battery may be smaller than a refrigerator but could produce 50 kilowatt hours, which is 28 more kilowatts than would be produced if an average person turned on all the appliances in a home for one hour.

“One of the problems with the electrical grid we have today is it has no storage capacity, but people like you and me and companies change the amount of usage throughout the day and week and throughout the year,” Witt said.

Electrical companies create at least as much as we’re using in order to supply during peak demand hours, he said, but that electricity is only used half the time. With the flow battery, electricity could be stored and only used when needed.

“The infrastructure needed to supply is larger,” he said. “There’s an opportunity – a way to store up inventory for a rainy day.”

The battery would be useful for alternative energy sources because of their natural variability.

“The sun doesn’t shine 24 hours and the wind doesn’t blow at the same speed every day, every hour,” Witt said. “It makes it difficult to plan.”

He said while the companies don’t expect these batteries to work for every situation involving energy-saving techniques, they do see it as a pretty large piece of the pie.

In addition, flow batteries are transportable and inexpensive. While Witt could not guarantee a lowest price, he said he thinks the team will be below all potential competitors in the marketplace. Both companies hope to bring more businesses and jobs to Montana with the new venture.

“That’s the whole endgame here. Obviously things start small and get better,” Wilkins said. “I’d love it if we could become the largest manufacturer in Montana.”

Murphy said this quarter Semitool only asked employees to take one week off, versus three weeks off last quarter. As demand increases and everyone begins working at full capacity, they will look to add more people.

“This is something that is a billion type of market versus the market we’re playing in today,” Murphy said. “The technology Zinc Air is bringing to the table for redox batteries is very intriguing. Will it be the silver bullet that wins the day? We hope so.”