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Applied Materials Confidential — Restricted / ModifierExternal Use

Challenges in Implementing Enterprise Architectures in the Semiconductor Equipment Industry

Presented by Chris PhoaEnterprise Architecture Practitioner

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Agenda

§ Applied Materials Profile§ Industry Spending History§ Industry Revenue History§ Key Behaviors leading to Challenges at

Applied Materials§ Strategies to address challenges§ What has some of the Strategies yielded?§ Conclusion

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Applied Materials Company Profile

§ Fast Facts– Founded in 1967– Our company develops, manufactures, markets and

services semiconductor wafer fabrication equipment for the worldwide semiconductor industry

– Worldwide Locations§ 14 Countries§ Approximately 70 Sales and/or Service Locations§ Manufacturing in North America, Europe and Israel§ Development in North America, Asia, Europe and Israel

– 12,400 employees

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Applied Materials Financial Profile

§ Past Four Quarters New Orders– $4,598 Million

§ Past Four Quarters Revenue– $4,702 Million

§ Gross RD&E Investment (5 years)*– $4,918 Million

* Note: RD&E data prior to FY ’99 does not include Etec Systems

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Worldwide Semiconductor Capital Spending

Source: Applied Materials Corporate Marketing estimates

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

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$ M

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Wafer Fab Equipment Company Revenue

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

TotalRevenue

($M)

Sources: Company Reports, VLSI Research 2/03

Nikon

Tokyo Electron

Applied Materials

LAM

ASMLKLA

CanonNovellus

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Applied Materials Rapid Rise and Success has led to Key Behaviors

§ “Now” or Action oriented culture§ Emphasis on Innovation and Time to Market as key to

revenues

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Key Behaviors Leading to Challenges

§ “Now” or Action Oriented Mentality leads to:– Tendency towards finding “silver bullet” solutions in lieu of thorough

analysis

– “Bell cow” approach

– Tendency towards solutions that can be implemented in short amount of time (30 – 90 days)

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Key Behaviors Leading to Challenges

§ Emphasis on Innovation and Time to Market as key to revenues leads to:– Entrepreneurship/internal competition encouraged to drive innovation

– Inadequate Communication (as a result of competitiveness)

– Highly de-centralized organization. Solutions tend to focus on local needs as opposed to enterprise wide.

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Strategies to Address Challenges

§ Education– Educate up (show business value, gain sponsorship)

– Educate sideways (earn credibility)

– Educate down (show big picture, forest instead of trees)

– Education through practical examples and/or actual practice (not through preaching)

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Strategies to Address Challenges

§ Turn some challenges into opportunities– Use of “bell cow” approach (to redirect the cow to greener

pastures)

– Take an indirect approach, focus on how to divide up into winnable chunks

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Strategies to Address Challenges

§ Focus on internal collaboration instead of competition– Entrepreneurship / Internal Competition, while maybe good for

product innovation, wreaks havoc for operations– Use of the Architecture Institution to “extend the olive branch”

to various IT Silo’s, open the communication lanes, be the broker of knowledge

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What have some of the Strategies Yielded?

§ Created organizational momentum to further the cause of architecture– Formation of an Architecture Review Board– Formation of an extended Architecture Team§ Forum to discuss technical issues (that otherwise never surface)§ Only forum for technical impact analysis

§ Implementing Architecture Compliance Process– To enable better planning for project managers– To free up architect time (less phone calls)

§ Better communication and collaboration– Architecture Review Requests have risen– Projects have been engaging the Architecture Team earlier in

their planning process

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Conclusion

§ Don’t treat as a “sprint”,

… treat more as a “marathon”

§ Fulfilling the Enterprise Architecture Vision is a journey whoseevery step can yield business value (Terry Blevins, The Open Group)

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