Revasum (ASX:RVS): Interview with CFO Rebecca Shooter-Dodd

We spoke with Rebecca Shooter-Dodd, CFO at Revasum Inc. (ASX:RVS), about the company’s potential in the fast-growing market for manufacturing tools for Silicon Carbide chips.

These chips are in high demand for Power Management in Electric Vehicles, 5G equipment, solar systems etc. The company just signed its first purchase order for the 6EZ polisher! We think there’s plenty more where that came from.

Revasum is also on Marc & Stuarts Top Picks list!

See full transcription below.

 

 

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Transcription

 

Marc: Hello and welcome to Stocks Down Under. Today, we’re joined by Rebecca Shooter-Dodd, CFO of Revasum. Welcome, Rebecca. Good to have you.

Rebecca: Hi, Marc.

Marc: So, Revasum is active in the semiconductor equipment space. I think there’s a lot to do these days about semiconductor equipment, a lot of capacity shortages. I think Revasum, with the type of products that it has, takes up a very special place within the semiconductor space. Can you talk a little bit about that, where you guys sit, what you do, just sort of high level, for viewers that don’t know Revasum that well?

Rebecca: Yeah, absolutely. So, we design and manufacture semiconductor capital equipment. So, we make single-wafer processing equipment, especially grinders and polishers. Our equipment grinds and polishes both silicon and silicon carbide. We’re mainly focused on silicon carbide right now because we think that’s a really great, high growth market to invest in given, kind of, the demand for electric vehicles and 5G, and the benefits of using silicon carbide in those applications.

Marc: Right. So what is the strategy here? Obviously you mentioned silicon carbide. There’s high demand for that. But can you talk a little bit about the strategy in terms of where you want to be, what, sort of, the product development road map is?

Rebecca: Yeah, absolutely. We’ve spent the last couple years since IPO developing the 6EZ Silicon Carbide Polisher. We’ve just sold our first two, which is awesome. So, we’ve finally kind of got that through to market. We’re still refining it and improving it. The next 12 months we’ll, kind of, be finessing that use of equipment and exploring other applications for that tool beyond silicon carbide and, kind of, working with our customers to make the tool work for them.

Marc: Can you talk a little bit about the differences with competitors because there’s other players out there, but there’s a few key differences, right, in terms of what your product offers that others don’t?

Rebecca: Yeah, absolutely. I always say our tools are just big white boxes. What people are really paying for is the process that they can achieve off that tool, kind of the secret sauce, so we don’t talk about it too much. But we have seen our tools compared to competitors’ tools and the process results that our customers are seeing off them, and we, kind of, consider our process results are way above and beyond what our competitors are achieving, making ours, kind of, the tool of choice. There’s other differentiators too. The 6EZ has an integrated cleaner, which no other competitor piece of equipment has. That just means the waste that comes off the tool, ready for pre-epi cleaned, so it [inaudible 00:03:00].

Marc: That’s actually been a messy process, right, the grinding and polishing. I saw some footage a while back where people are basically doing a lot of manual cleaning of the actual wafers, where it doesn’t really…when think about semiconductor manufacturing, you don’t think of a manual process like that really.

Rebecca: Yeah, but batch processing in particular, you have people, kind of, leaning into the equipment, moving wafers around by hand. Our equipment is totally automated, so it removes the need to do that.

Marc: All right, so silicon carbide. Can you talk about the drivers of that? I mean that’s really the segment that you’re playing for the next couple years, but there’s underlying drivers of that. Can you talk about that and what makes you so confident that you’ll have a very bright future for these particular tools?

Rebecca: Yeah, absolutely. So, there’s some really high growth end markets driving the demand for silicon carbide wafers. Right now, the key ones we’re seeing are electric vehicles, and 5G. Silicon carbide is the material of choice for these applications. It’s much better than the traditional silicone that people normally use, makes the car go further, makes it charge faster, kind of, all the good things to get people to adopt electric vehicles quicker, which is kind of at the top of every government’s list of requirements right now. Yeah, we’re excited by the end markets driving demand.

Marc: All right. So, I’ve been following the semiconductor industry for more than 20 years now, especially in the early years that I started covering it there was huge, sort of, swings up and down. That, sort of, diminished a bit over the last 10, 15 years, but, there’s still quite a cycle involved in the semiconductor space, because of overinvestment, underinvestment which is actually what we saw last year with COVID. So, there’s bound to be another downturn at some point, but given the current shortages, that will probably be at least, you know, 18 months away. When that happens, do you see a secular growth trajectory for silicon carbide given that it’s so specific and there’s such a strong demand longer term? Did you consider maybe get out of that sort of down turn that will come at some point?

Rebecca: Yeah, I think right now the general concern is we’re in unchartered territory. Like you said, we’re seeing shortages like we’ve never, never seen before in the industry with demand for silicon and silicon carbide increasing rapidly as people, kind of, have electronic phones, electric vehicles. The demand is massively up this year. And I don’t see that changing for the next 12 to 18 months, so we’re looking at growth for the next two to three years at least, I would say.

Marc: In terms of the market size, I mean, is there a few really big players in silicon carbide, wafers especially, you’ve got Tree, you’ve got STMicro, but I think if you look at automotive semiconductors in general, you’ve got other players, probably like EXP or Infinium. How many tools do you think the market needs, specially, you know, polishers, and grinders to satisfy the demand in the space?

Rebecca: Yeah, so this is a difficult question to answer right now. What we’re seeing with our customers is they’re still in that research and development stage, so it’s single-wafer processing. As the market moves to 200 mm, so 8 inch silicon carbide wafers, we believe people will have to go to single-wafer processing. It just doesn’t make sense to do batch with that wafer size. You can’t get enough in the tool. So, we obviously just sold the first two to a top-tier customer in Europe, with additional forecast demand next year. We’re anticipating that the top players in the market will be looking for a similar number of tools, so…nobody wants just one. So, yeah we’ll see how it goes. I think the next six months will be very telling as to the uptake of the 6EZ and how the next few years are gonna look.

Marc: So, maybe a bit of a follow up. How do you see demand progressing then in the next 12 to18 months. You’ve got one purchase order from one customer right now, but is it fair to assume that more will follow? I know it’s a hard question and you have everyone looking over your shoulder including ASX, so I know it’s a difficult question, but I guess investors are, sort of, keen to understanding what the dynamic is here.

Rebecca: Yeah, and I can, kind of, let investors know where we are. So, we obviously have another pullout for evaluation. The PO wasn’t from the customer that has the tool for evaluation. So, that evaluation is currently wrapping up. The customer is really happy with the tool and we anticipate that a PO will come from that. Like I said, nobody wants to just take one tool and we are, kind of, firmly engaged with all the other key players in the industry that I just can’t name, but I think anyone can guess who they are. So yeah, I think we are well positioned for the next 12 months and it’s just, kind of, seeing how it goes for now.

Marc: Right, okay. Last question, Rebecca, the hunt for the new CEO. Can you talk a little bit about how that’s going right now?

Rebecca: Yeah. So, it’s ongoing. Our focus right now is to find a really great CPO and expand our processing engineering team. Like I said, people buy our equipment for the processing side of the tool. So, that’s what we’re focused on right now. And car management team, we’re delivering on the strategy, getting POs for the new tool. And yeah, when the right person comes along, we’ll make a move.

Marc: All right, well exciting times, Rebecca. All the best in the next 24 months, I’d say. It’s probably extremely busy for you right now. And good luck with the roll out of all the new equipment, with the hunt for a new CEO and we’ll keep close track of Revasum. It’s, as you know, one of our topics for Stocks Down Under, so we’re extremely excited about the opportunities here. Yeah. So, again, we’ll keep close track of how you guys are doing.

Rebecca: Awesome. Great to talk to you, Marc.