Pivotal Systems (ASX: PVS) designs and sells industry leading flow control subsystems for semiconductor processing equipment, that give a significant competitive advantage to the largest semiconductor producers in the world.

With estimated revenues of greater than $365 billion a year, the semiconductor industry is experiencing a significant growth period that is expected to continue into 2022. COVID-19 has actually accelerated the industry growth as more and more IT infrastructure has been added to facilitate a global remote workforce.

“As many people are working from home, we are seeing a large increase in demand for semiconductors going into PCs and data centres,” said CEO John Hoffman. 

For major technology companies to continuously develop better devices and stay competitive, they need to improve factory output and improve the yield of manufactured devices. In many cases, better semiconductors mean new technology and that leads to new semiconductor factories and innovative technology. 

“In an industry that is at the absolute cutting edge of innovation, 10 year old flow control  technology isn’t sufficient.  Therefore, Pivotal came up with a new technology. Our scientists and engineers have been able to take the latest from nanotechnology, artificial intelligence and machine learning and apply it to critical flow control. It’s a position control valve that we are able to control at the thousand’s of second speeds with absolute accuracy of one nanometer. This allows us to control the valve in a very dynamic environment of pressure and temperature. Our competitors do not have this capability of speed and precision. Our customers are not only finding it to be beneficial, they are seeing it as a requirement in the most advanced process steps”.

Since the company started in 2011, Pivotal Systems flow control solutions have indeed attracted the business of those blue chip companies. Pivotal has averaged 61% a year growth in customer qualifications. In 2020, Pivotal delivered record revenues, up 44% over 2019.

Going into 2021, Pivotal is focused on widening the gap between their competition.

“In 2020, we saw an inflection point as the major Original Equipment Companies (OEMS) began to design Pivotal’s advanced technology into their new, leading process equipment.  We see this continuing into 2021 and beyond. Once the equipment companies understand the advantages of better speed and precision, they have a difficult time using older technology ,” said John.

“5G phones have twice the silicon content, or twice as many integrated circuits as a 4G phone. That’s the type of thing that drives more silicon and that drives more business for Pivotal. I’d also add that artificial intelligence, Internet of Things and all of the activity around automation and electric cars are all driven by semiconductors,” said John.

“We see strength in the overall market. We see strength in our product lines and we see strength in the industry growth. We’re very optimistic going into 2021,” said John.

 

Pivotal’s CEO John Hoffman recently joined us for our fortnightly webcast ‘The Insider’. This article summarises some of the information he shared with us during the session. You can watch a full recording below, or you can click here to book into our next session where we will be joined by Michael Winlo, CEO of Emyria Limited and Murray Hill, Managing Director of Marenica Energy.

‘The Insider’ is a great way to hear directly from the CEOs of fast growing Australian businesses. You will get valuable insights to their industries and companies future prospects.

The Insider: Meet the CEOs – Event Details:

Date: Wednesday, 17th February Time: 12pm AEDT Format: Online, 2 x 15 minute presentations

This is a free event. Click here to book your spot.

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