VentureWire: Flip Chip Co. NEXX Systems Plans To Raise $5M-$10M Series C

March 31, 2005

NEXX Systems Inc., a chip-processing equipment company, is targeting $5 million to $10 million for its Series C round, Chief Executive Richard Post told VentureWire. The financing is expected to close in the next few months and is slated to be its last round, with the company achieving healthy revenue growth.

Post is projecting $20 million in revenue this year, about 50% growth from its 2004 revenue of $13.4 million. He expects continued revenue growth over the next five years.

To that end, the company has appointed former Newport Corp. executive Kevin Crofton as its senior vice president of sales and marketing.

Crofton is familiar with NEXX, having served on the company's board as a representative of Newport until November 2004. Robert G. Deuster, chief executive of Newport, took over Crofton's board seat.

Crofton joined Newport in January 2002 as the vice president and general manager of its advanced packaging and automation systems division. Prior to Newport, he served as managing director and general manager of the chemical mechanical planarization/clean products group at Lam Research Corp.

NEXX Systems provides processing equipment for wafer-level packaging applications. Its expertise is in the area of flip chip and advanced packaging.

Flip chip is a packaging technique in which the active area of the chip is "flipped over," facing downward. The flip chip doesn't require any wire bonds and allows for a large number of interconnects with shorter distances than wire.
Post said this process was invented by International Business Machines Corp. and has gone mainstream with Intel Corp. using the process on its Pentium chips. He added that this process yields the benefits of speed, smaller size and better thermal capabilities and enables applications in high-speed PCs, compact cell phone cameras and other portable devices.

Morry Marshall, an analyst at Semico Research Corp., agreed that the flip chip offers the advantages of speed, power handling capabilities and ease of connection. "Flip chips have been around for a long time," he said, but with the number of chip connections increasing in today's electronics, there is a growing need for better power handling as integrated circuits get smaller and more power-hungry.

He said companies that supply the materials and the technologies for flip chips do have an advantage in the market.

The flip chip is gaining a stronger foothold, according to Post, with this piece of the semiconductor market growing 25% a year.

Post said NEXX is focused on becoming the dominant equipment provider for the flip chip market and has a growth plan that includes target acquisitions and a potential IPO.

Based in Billerica, Mass., the company has 55 employees and has raised $20 million to date. Investors include Enterprise Partners Venture Capital and chip components maker Newport Corp.