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Atomica CEO Eric Sigler plans to join a plethora of chipmakers seeking some of the $52 billion in CHIPS Act subsidies to be disbursed this year, he told EE Times.
The microelectromechanical systems (MEMS) foundry, earning about $30 million a year, runs a small facility in California with a team of 150 employees. Atomica doesn’t make transistors; it makes cell sorters, silicon photonics, pressure sensors and motion sensors.
“If you can think of an application for photonics or MEMS or sensors, we probably have experience or active programs in those areas,” Sigler asserted.
The company has about 50 customers, including Miltenyi Biotec, a German firm that makes biomedical-research products that enable cell and gene therapy.
The MEMS industry will exceed $22 billion in revenue by 2027, growing annually at about 9%, according to a September report from market research firm Yole Group. Automobile parts maker Bosch dominates the MEMS business, according to the report. Bosch, Broadcom, STMicroelectronics, Qorvo, TDK, Goermicro and Texas Instruments are the top companies, according to Yole.
“Until a couple of years back, the top MEMS foundries had little revenue (typically less than $60 million),” according to the Yole report. “Now, as new companies sprout with an appetite for outsourced MEMS manufacturing, MEMS foundries are reaping the fruits, growing their revenues strongly.”
From 2020-2021, the top four MEMS foundries grew between 20-48%, outpacing growth of the overall MEMS market, according to Tim Brosnihan, executive director of the MEMS & Sensors Industry Group at industry association SEMI. Megatrends like 5G and autonomous driving are creating big growth opportunities for MEMS. He foresees greater consolidation in the industry.
“The big players have been acquiring many companies, and further consolidation is probably inevitable,” he told EE Times. “We do see lots of start-up companies continuing to enter the MEMS and sensor space, keeping a diverse ecosystem.”
CEO Sigler says he would prefer to seek a public listing for the company once Atomica reaches sufficient scale, but he doesn’t rule out acquisition.
“Our investors are fairly long-term minded, fortunately, so we should have a few years to demonstrate progress toward, say, $100M+ in revenue at which time we should be a good IPO candidate.”
Atomica supplies Miltenyi with cell sorters, electromagnetic actuators that rapidly isolate different types of cells.
“In the blood, you’re trying to get a certain type of immune cell, T cells, natural killer cells, where you’re trying to isolate stem cells or red blood cells from white blood cells,” Sigler said. “We make these little MEMS chips that go into a disposable cartridge that are used in really game-changing therapies for treatment of different diseases. Instead of bombarding the body with radiation and chemotherapy, there’s this whole new field called chimeric antigen receptor [CAR] T-cell therapy, where you instead take a patient’s T cells, reprogram them with new DNA and put them back in the body—so that your own immune system can go out and hunt and kill the tumor in your body.”
Chinese investors pursued U.S. giant
Atomica asserts it is the largest dedicated MEMS foundry in the U.S.
“There are very few MEMS foundries left in the world, and our biggest competitor, Silex, is now owned by the Chinese government,” Sigler noted.
During the administration of former U.S. President Donald Trump, investors in China were interested in acquiring the company that would later become Atomica.
“In 2017, I go to China, I get some great offers to sell the company,” Sigler said. “We’ve got very attractive buyout offers on the table, and we get all the way to what you call a definitive agreement. We have to sit down with CFIUS [the Committee on Foreign Investment in the U.S.] to make sure that sensitive technology is not getting sold offshore.”
The deal was nixed.
“The whole deal blows up at the 11th hour because the buyer was clearly a state-owned entity,” he said. “The Chinese were buying everything they could in this industry.”
The company’s venture investors asked Sigler to search for other deals.
“There were some very lowball offers from domestic private equity firms, but frankly, they weren’t even worth as much as the real estate,” he said.
Sigler and the CEO of Atomica’s precursor—IMT—made an offer to buy the company. “We went off and raised money by refinancing the real estate in what’s called a sale-leaseback transaction,” he added.
Atomica has been hovering around the breakeven level since it was restructured. Longer than 20 years ago, before IMT, the company was known as Applied Magnetics, a billion-dollar company that made read-write heads for hard-disk makers like Seagate and Western Digital.
‘Poster child’ for incentives
Atomica is “kind of a poster child” for the CHIPS Act, Sigler said.
“What’s more important to the U.S. economy is that there’s a place where all 20 of those LiDAR [laser imaging, detection and ranging] companies can go make their chips without having to build their own fab,” he added. “As the only foundry [in the U.S.] supporting all these places, it sure seems like we are as logical a candidate as anybody to receive some incentives.”
The company will be competing with much larger companies like Taiwan Semiconductor Manufacturing Co. (TSMC), Intel and Micron. They have announced multi-billion–dollar investments in the U.S. that are likely to win CHIPS funding.
“If you look at the $52 billion, $39 billion of it is Section 9902, which is direct incentives for manufacturers like us,” Sigler said. “There are all these other pockets of money like the NSTC [National Semiconductor Technology Center]. We’re a member of some of these coalitions that are bidding on the NSTC money.”
The U.S. needs a competitive MEMS foundry that has all the requisite tooling and modern capabilities and processes, he said.
“We’re competing with companies like Silex, which gets hundreds of millions of dollars in government money. Here we are, as a privately backed small business that’s trying to compete with all these government-backed companies.”
The fact that Atomica does not manufacture transistors makes it unique, Sigler said.
“We’re making these mechanical structures. Chips have a lot of contaminants in the CMOS world. We’re putting gold down, we’re putting nickel iron down, we’re putting glass down, which has sodium ions in it. All of those things are massive contaminants to a CMOS fab. You just can’t afford to have those contaminants in a CMOS line. We’re making mechanical structures that that are interfacing with the world or moving fluids or sensing something. So that’s why there just aren’t many places left in the world that do what we do. There’s a much narrower set of MEMS devices that can be made in a CMOS fab.”