Wall Street Transcript Interview with Arthur W. Zafiropoulo, the Chairman, CEO and President of Ultratech, Inc. (UTEK)

Wall Street Transcript

67 WALL STREET, New York - October 8, 2012 - The Wall Street Transcript has just published its Semiconductors Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Semiconductor Capital Equipment - Cloud Computing - Mobile Device Consumer Demand - Enterprise Data Storage Demand - High Computing Power Technology - Semiconductor Inventory Burnoff

Companies include: Ultratech Inc. (UTEK) and many others.

In the following excerpt from the Semiconductors Report, the CEO of Ultratech discusses the outlook for his company for investors:

TWST: Please start with a brief overview of Ultratech, the company's history, products, services and customers.

Mr. Zafiropoulo: Ultratech was incorporated as a company in 1979, and then it was acquired by General Signal in 1981. This company is not a recent startup. It's an older company with a great heritage, initially founded by two individuals that really were ahead of their time, who were focusing on lowering cost of ownership in the manufacturing of semiconductors. The culture of the company in terms of low-cost manufacturing really began with its original founders.

I joined General Signal through the acquisition of my company back in the Boston area in 1986, and I ran several of their U.S. companies and international operations related to the semiconductor equipment industry from Boston. In 1990, I came to Silicon Valley and transitioned to the wholly owned entity Ultratech with a new vision. The parent corporation, General Signal, really began to disengage from this industry and focus on other parts of the business that didn't include the equipment industry. I was asked to fix Ultratech, and either get it sold or dispose of it. I relocated and lived in a hotel for a year and a half, and was successful with a great team of people at Ultratech to fix the company. We refocused its mission statement, changed the business model, changed the direction of the company, and became successful quite quickly. It lacked leadership for several years prior to my coming here, but I was able to make decisions quickly, communicate with the team, and really get them to listen to me, which has been an important component of my leadership style. It was a great success story for the entire team.

Later in 1992, when the company was repaired, General Signal couldn't divest it, so they offered it to the management team, and I put up a significant portion of my net worth and bought the company with TA Associates in 1993. The stock market was very strong at that point in the technology space, and shortly after we went public at the end of 1993 as Ultratech Stepper. We were a stepper lithography company printing images on electronic compounds, semiconductors, thin film heads, etc. We later changed that name to Ultratech so that we could expand into other areas in the semiconductor and related industries without being pigeonholed into being a stepper lithography company.

We modified the strategy, moving away from being just a company competing with the likes of Nikon, GCA and Canon. We went into a guerrilla warfare mode, attacking smaller markets that were focused on technology that needed printing using high energy, for more noncritical geometries - not some of the finer features - so that we could establish a presence and position in the niche market.

The company has evolved about three times since I joined in 1990, and the last transformation occurred a few years ago when we moved from a pure stepper company to one that is engaged in other disciplines, including the laser technology for forming transistors. We'll talk about that a bit later.

Now we're again moving and expanding the role of our company into the inspection area. But all of these areas relate to the same customer base and the same important focus - high margins, great products, low cost of ownership. So we retained the company culture; however, we've driven this company into much bigger markets. We now dominate segments of the markets that we had attacked earlier and are expanding that base, so that as we morph from one form of a company to another, the company progressively becomes stronger.

Today, we are a very strong technology company focusing on specific markets that we either dominate today or we will tomorrow, and those markets are ones that have significant growth. So we're making great progress in the growth of our company, which has been exhibited by our market share, our profitability and our current target models. I think now investors have a really great appreciation of our company. We certainly have areas to work on, but it's more of what's around the company, and we can talk about that more during the interview. But this company today is focused on technology products related to semiconductors, the disk drive industry and the high-brightness LED industry - those are the areas that we're currently focusing on.

TWST: What are the most significant trends, developments and changes you anticipate in your markets over the next two to three years? And if you could, focus on the laser processing equipment.

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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