Carlos Lee, director general of the European Photonics Industry Consortium (EPIC) speaks with Thomas Zettler, CEO and co-founder of LayTec, on how the firm’s growth relies on keeping a good balance between industry and academia
How did LayTec begin?
LayTec will celebrate its 20th anniversary later this year. We started as a metrology company in 1999 and quickly became a leader in the field of in-situ metrology for LED and laser production. We started by providing metrology equipment for the compound semiconductor industry, but now our products are used in several sectors: electronics, display, optoelectronics, photovoltaic, silicon-based semiconductor, and industries that are a combination of mass-production and research, as well as universities and research institutes.
In the early years, LayTec focused entirely on the academic research market, but year by year we developed into a company providing metrology for industry, as well as academia. It is this balance between industry and academia that guides the direction of the company, because one definition of an entrepreneurial organisation is that it recognises when there are changes in the market. It is a good investment to continue business with universities and research institutes, because they are indicators of new developments in material science and device structures.
We would like to continue this industry-academia balance. Even though selling metrology equipment to academic customers is usually not as profitable, this is a good investment for LayTec’s future. We won’t stop making a product simply because there is not yet a big industry market behind it.
The other advantage of doing business with academic customers is that it’s a good way to recruit. We provide training for universities and work with nearly every PhD student generation at these institutes. The universities and PhD students know us, and we sometimes know the person applying for a position at LayTec, and will know whether they will fit into our company philosophy and climate.
Another important part of doing business with both universities and industry is that many PhD students, when they graduate, will work in a similar field. Because they know our research metrology systems, it’s then easier for them to use the industry-type metrology systems later on in their careers.
How are staff organised at LayTec?
All our employees are technology people, because we are a high-tech company. Roughly one third of staff are involved in R&D projects; one third are close to the customer, which is not just marketing but is also about service and application engineering – to work together with the customer to make the product as profitable as possible, and to reach a return on investment as early as possible. Then the remaining third is involved in organisation, manufacturing and quality testing.
How large is the company?
LayTec, singly, is an SME, but we are part of a group of companies under the holding company Nynomic. Nynomic is made up of: Avantes, LayTec, m-u-t, tec5, APOS and Spectral Engines. These companies are all involved in optical measurements based on spectroscopy. As a group of metrology companies, we are not an SME anymore.
The merger with Nynomic in 2017 happened in order to improve our capabilities to organise our future and not be driven by the market. Of course, we have to learn from and adjust to the market, but being part of a larger group means we have early information about the market, and allows us to respond early to new needs.
The merger came about, initially, because I knew some of the CEOs from the Nynomic group and, in private talks, I got my first impression of how Nynomic works. Then we had discussions with all the CEOs, and visited the companies in the group and the key shareholders to learn what they think about the future of the group. After going through this process, we decided that it’s a good idea for our owners, employees and customers to be a part of the group.
There are several advantages to being part of Nynomic, one of which is the improved supply chain of components for use in our metrology systems. The basic idea of joining Nynomic was to create an entity that continues to be successful over the next decades. And one must think early as to the developments that might take place in the next 10 years. In order to avoid a situation where you must make fundamental decisions about the future of the company in just a few years, or even a few months, we started early and watched the market – and discussed internally who would make a good partner. We tried to make the best decision for the future of the employees and the business – Nynomic was a good fit for us.
Big companies are often successful, because they dominate the market and can operate efficiently at a large scale, but they sometimes fail in innovation. The structure of Nynomic, made up of sister companies that are free to develop in their markets, is a good compromise. I think LayTec’s chances of providing ongoing high-performance solutions for our markets have increased by joining Nynomic and to share the synergies of this high-tech group of companies.
We signed the contract in 2017 and 2018 was a very successful first year in the group. It’s really a nice development for our products and sales figures. So far, all the team is highly motivated to use the advantages within the group.
The companies within Nynomic work in different fields and don’t typically compete in the same markets. At first sight you might think tec5 and LayTec may be competing, but if you look closely at the expertise and strengths of both, each serve different applications, markets and needs. There are companies in the group that supply bespoke systems, such as LayTec, and others that are more focused on general production of systems.
What did you look for in a partner?
We looked for a partner that is not a risk to our long-term success. So, partners only driven by financial performance, and optimising the procedures for the next quarter results – these are the kind of investors we excluded. We also looked at firms that want to strengthen the European industry. Nynomic, as a European firm, therefore had several advantages in comparison to non-European companies located in high-tech regions somewhere else.
Another consideration was that a large part of Nynomic’s shares are still owned by the founders – this adds even more stability for the long term.
How do you promote entrepreneurial spirit?
In principle, our relationship with Nynomic is a merger, but LayTec remains a brand and keeps its name. There are no major changes in the organisation, except some synergies that really help us.
And it is a perfect environment for employees, because their opinions matter; it’s not like someone from the outside will come in and tell them what to do. We grow as a group.
It is also important to be transparent about the general business situation, in good times and bad. Every employee at LayTec is informed once a month about what the company is doing: the key projects; why we are focusing resources on certain projects and why we invest less in others; what the expectation in the market is for photovoltaic and compound semiconductors; and other factors. Therefore, if the management decides to move in a certain direction, it is easier for the employees to understand the reasons behind this.
This is one way of promoting an entrepreneurial spirit within a large percentage of our employees. Another way is by learning and training via projects with customers.
Entrepreneurial spirit at LayTec has many facets.
One of our employees left and founded his own software company, and we remain in close contact with him. We also invested in a German start-up metrology company and still collaborate with this company. And some young and gifted engineers, who got their first job with us out of university, moved on to seek larger companies, but then came back – bringing with them new knowledge.
Finally, we also developed products for large-area deposition through founding and growing a start-up subsidiary, the technology for which was then reintegrated back into LayTec after eight years.
