How KLA has keeps moving the industry ahead

Summary : Few companies have accelerated the industry as much as KLA has.

Few companies have accelerated the industry as much as KLA has. And it’s more that what’s in the name: Keep Looking Ahead or in the technology they have developed. Technology is hard to monetize, unless it brings significant value to the customer over and above its cost. It often takes great marketing to find the hidden jewels of the value a solution can bring to the customer.

According to the maxim: Customer value is determined by the sum of the increased revenue and the decreased cost after implementation times the customer’s hidden depreciative constant (typically a 0-1 value, but occasionally greater than one).

                               Vi = k(Ri + Cd)



Vi = Value of implementation

Ri  =  Revenue increase after implementation

Cd =  Cost decrease after implementation

k   =  Customer’s hidden depreciative constant

For example, the depreciative multiple of a yield gain is often 0.00-something, as most customers will see yield gains along the lines of the saying, “If I had a dollar for every percent yield gain, I’ve been promised, I’d be rich.” This fact, has always put process diagnostics companies, like KLA, at a disadvantage. It takes great marketing, like the kind KLA regularly does, to raise this multiple.

KLA’s great service to the industry has been in raising the depreciative constant to greater than one by showing that there is additional value to a yield gain in eliminating the downstream costs of additional process steps on bad wafers. Another multiple bump from KLA was the discovery that higher yield also equates to higher reliability in the field were rule-of-ten cost factors weigh in. Customers often overlook these types of hidden benefits. The value of positive marketing is to open the customer’s eyes to benefits they might not have seen, which accelerates technology adoption and benefits the industry as a whole.

Importantly, KLA first sells the customer by building consensus among them through user forums. User forums network customers, making individual buy-ins to a new value proposition more visible. This builds FOMO among those who have yet to buy-in, driving them to buy-in for Fear Of Missing Out. Metcalfe’s Law on networks also applies here, as the value of such forums are an exponential of the number of customers. KLA has been masterful in its development of these methods to uncover hidden value for customers.

For more of KLA’s history:

From the Maxim: The likeliness of technology adoption is proportional to the value of the problem it solves less the pain of implementation, originally published May 24, 2019, The Chip Insider

Author: G Dan Hutcheson

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