Product Management Through the Ups and Downs of a Cyclical Industry by Ray Martin at SVPMA Monthly Event December 2005

1. Product Management
through the
Ups and Downs
of a Cyclical Industry
Ray Martin
Sr. Director, Product Marketing
Asyst Technologies, Inc
SVPMA Dec 7, 2005

2. In 1593, tulips were first brought
from Turkey to Holland.
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3. The market
flourished.
But, in 1637,
the tulip
market
suffered a
correction
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4. Many traded their
entire estate for a
single tulip.
They found out the
tulip was only worth
the price of an onion.
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5. Agenda
• Introduction
• Product Management
Communication Enhancement
• Analyzing Cyclicality
• Guidelines for Product Managers
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6. Asyst Technologies Inc.
Introduction
Founded 1984
Revenues of ~$600M
850 employees
Provides automation solutions optimized for
the needs of our global customers in the
semiconductor, flat panel display, and related
industries.
6
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7. The Asyst Solution
For a modern Wafer Fabrication Facility
Isolation
Systems RFID-based
Asset
Management
Automated Transport Connectivity
and Loading System Software
Substrate-
Handling Robotics
7
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8. Major End User Customers
Silterra
8
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9. Major OEM Customers
9
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10. Product Management
Communication Enhancement
10
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11. Analyzing Cyclicality
Some
cycles are
predictable.
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12. Some cycles are simple
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13. Combinations
of cycles are
more
complex:
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14. There are technology cycles
Moore’s Law
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Source: Ron Leckie, Infrastructure

15. There is a Technology Adoption Cycle
Pragmatists: Conservatives:
Stick with the herd! Hold on!
Visionaries:
Get ahead of the herd! Skeptics:
No way!
Techies:
Try it!
Innovators Early Early Majority Late Majority Laggards
Adopters
Pragmatists create the dynamics of high-tech market development
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Source: Geoffrey Moore, Crossing the Chasm

16. The Chasm
Main Street
Tornado
Early
Market
Chasm
Bowling Alley
Innovation strategy changes at each stage
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Source: Geoffrey Moore, Crossing the Chasm

17. There are Business Cycles
Semiconductor Cycles 1973 - 2005
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Source: Infrastructure Advisors Copyright 2005

18. There are major trends
Population: 1750 - 2150
Source: United Nations, World Population Prospects, The 1998 Revision;
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19. And there are Rogue Waves
Rare photo of
a Rogue Wave
On an oil
freighter off
the coast of
Durban,
South Africa
This wave is
about 35 feet
high
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20. Guidelines for Product Managers
1. Understand the cycles affecting your industry
2. Understand the major trends affecting your industry
3. Choose the Best Products and Take Pets to the Pound
4. Create Alignment in the organization
5. Spend the time to forecast well
6. Diversify into counter-cyclical industries
7. Unseat an incumbent
8. Manage mergers & acquisitions effectively
9. Design simple processes that survive turmoil
10. Be proactive with headcount management
11. Outsource intelligently to respond to ups & downs
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21. 1. Understand the cycles and
your customers’ needs
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22. Semiconductor Industry Cycles
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23. Observations of Semiconductor
Industry Cycles
• The Chip Industry cycles overshoot Electronic End
Equipment Cycles
• Chip Industry cyclicality drives greater cyclicality in
Semiconductor Equipment
• The Semiconductor Equipment Industry gets whipped by
the Changes in the Chip Industry
• “Rogue Waves” randomly occur
– 1973 Gas Crisis
– 1982 Gas Crisis
– First Gulf War (1991)
– Asian Financial Crisis of 1997
– Y2K
– Internet Bubble
– September 11, 2001
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24. Semiconductor Cycles 1973 - 2005
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25. Global Semiconductor Revenue
Jan-01 to Jul-05
Billions of USD
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26. Wafer Fab Equipment Orders
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27. Economy vs. Performance Model
Hi
Your Company’s Performance
Silver Gold
Medal Medal
Bronze
Medal
Low
Low Hi
The Economy’s Performance
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Source: Paraphrased from Andy Grove, Intel

28. 2. Understand the major trends
affecting your industry
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29. Major Trends affecting Telecom
"This may be the most exciting period in the
history of the telecommunications industry." -
Paul Johnson, Analyst
• Convergence
• The fiber optic revolution
• From analog to digital
• Bundling of services
• The importance of data
• The broadband opportunity
• Domestic regulatory changes
• International regulatory changes
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30. The Five Competitive Forces Model
Source: Michael E. Porter's 1980 book “Competitive Strategy: Techniques for Analyzing
Industries and Competitors SVPMA Dec 7, 2005 30

31. 3. Choose the Best Products &
Take Pets to the Pound
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32. 4. Create alignment in your
organization
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33. 5. Spend the time
to forecast well.
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34. Useful forecasting tools
• Signs point to yes.
Tasseography
• Yes.
The Art of • Reply hazy, try again.
Reading Tea Leaves
• Without a doubt.
• My sources say no.
• As I see it, yes.
• You may rely on it.
• Concentrate and ask again.
• Outlook not so good. There are
• It is decidedly so. two types of
• Better not tell you now. . Forecasts
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35. Spend time to forecast:
Find & Watch Leading Indicators
Equipment and IC Book to Bill
2.50
2.25
Equipment B:B
2.00
IC B:B
1.75
1.50
1.25
1.00
0.75
0.50
0.25
0.00
RESTRICTED DATA : for access and use only within your company, as per your company's agreement with VLSI Research Inc.
Reprinted with permission of VLSI Research
Copyright © 2005 by VLSI RESEARCH INC. A ll rights reserved.
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36. IC Unit Shipment Trend
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37. 6.Diversify into counter-cyclical
industries
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38. Performance of a highly cyclical
and a non-cyclical company
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39. 7. Unseat an incumbent
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40. Look for windows of opportunity
to unseat an incumbent
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41. 8. Manage mergers &
acquisitions effectively
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42. 9. Design simple processes that
survive turmoil
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43. The Copy Exactly! Process
Helps Fabs Climb the Yield Curve Faster
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Source: Intel website

44. 10. Be proactive with headcount
management
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45. 11. Outsource intelligently
to respond quickly
to ups and downs
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46. Outsource Intelligently:
• Freeze the product prior to transfer and
create complete documentation
– Don’t rely on tribal knowledge
• Documentation for ESL
– English as Second Language
• Configure the product appropriately
– Customer Requirements evolve
– Configure for Cost Reduction
– Regulatory Requirements
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47. Summary & Conclusion
1. Understand the cycles affecting your industry
2. Understand the major trends affecting your industry
3. Choose the Best Products and Take Pets to the Pound
4. Create Alignment in the organization
5. Spend the time to forecast well
6. Diversify into counter-cyclical industries
7. Unseat an incumbent
8. Manage mergers & acquisitions effectively
9. Design simple processes that survive turmoil
10.Be proactive with headcount management
11.Outsource intelligently to respond to ups & downs
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48. Thank you
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