Semitool Celebrates 30-Year Flathead Anniversary

By Beacon Staff

Driving along Birch Grove Road between his two Semitool locations in Kalispell, Ray Thompson points to his roots. He slows down to locate his grandparents’ old farm. Seconds later he passes the one-room schoolhouse his older siblings attended so many years ago.

These landmarks help explain why, in 1979, Thompson decided to move Semitool, a small but cutting-edge company at the time, from bustling California to the Flathead. He had founded the firm in Santa Ana a year earlier.

With Semitool, a leading manufacturer of wafer processing equipment for the semiconductor industry, celebrating its 30-year anniversary in the valley, Thompson allows himself these moments of nostalgia. His decision to bring his business back to his hometown 30 years ago has paid dividends.

Today Semitool has nearly 830 employees spread across the world, from Korea to Kalispell. But most – 510 – work in Kalispell and Libby. The majority of the overseas employees are in sales; the heart of Semitool – manufacturing – is based out of two Kalispell factories, one of which sits at the bottom of Birch Grove Road, just down the street from his siblings’ one-room schoolhouse and his grandparents’ farm.

Thompson said that to survive in the competitive, ever-changing semiconductor industry, it’s necessary to have independent and innovative thinkers on his staff. He said Montana, where people are known for blazing their own trails, has consistently provided those thinkers. Everybody, from the machinists to the engineers, needs to have an experimental instinct to keep Semitool ahead of the curve, Thompson said.

“They tie their own flies, they load their own ammunition and then they come to work for Semitool – in that order,” he said. “They’re craftsmen.”

Almost anybody who lives in the valley has heard the name Semitool, though few know exactly what the giant company does. Essentially, it manufactures the equipment and tools necessary to make microchips. But that hardly describes the complex technological wizardry actually taking place inside the factories.

A tour through both Semitool’s Birch Grove manufacturing facility – located in the old Costco building – and its main headquarters on Reserve Drive reveals a deeply layered world of manufacturing, one where chemical engineers and welders each have their turn. The Birch Grove building is 72,000 square feet and the Reserve Drive facility is several times larger.

In the final assembly room, where the last touchups are done before the products get shipped out, the floor is covered with large machines capable of performing a wide array of tasks necessary in the microchip industry. For the past few years, the company’s backbone has been its Raider single-wafer tools, which sell for between $2 million and $4 million apiece. Semitool has shipped out more than 300 Raiders to date, Thompson said.

Semitool’s innovative engineering crew – made up of software, mechanical, electrical and chemical engineers – is never at rest. The company has several hundred patents, Thompson said, and a full-time patent attorney.

“We design and build robots,” Thompson said.

Semitool took its share of lumps over the past year. Due to lagging customer orders, the firm laid off 100 employees in Libby and Kalispell last November. Then in January it laid off 280 employees worldwide, including almost 200 in Montana. The Libby plant, which specializes in valve assembly, once had 60 employees but is now down to fewer than 25, Thompson said.

But after the company announced that more layoffs might be on the horizon in March, customer orders began to grow enough that jobs were eventually added again. As of last week, its worldwide work force was back up to 826 after dropping below 700 earlier in the year.

Roughly 80 percent of Semitool’s products are sold overseas, mostly in Asia, though historically Europe has constituted 30-40 percent of the company’s business, Thompson said. With a recent surge in the semiconductor industry, the Asian markets have been particularly fruitful.

Semitool posted strong third quarter earnings and its fourth quarter bookings are higher than anticipated. From the second quarter to the fourth, bookings jumped from $24.6 million to $71.7 million, representing the largest sequential increase since the company went public in 1995.

“People are surprised to see all of this in such a remote location,” Thompson said. “It’s been a very satisfying place to have a business like this.”

Stay Connected with the Daily Roundup.

Sign up for our newsletter and get the best of the Beacon delivered every day to your inbox.