Founder reflects on Semitool success

Ray Thompson, founder of the recently sold Semitool, said he decided in 1979 to base the business in the Flathead Valley because of the great respect he had for the character of the people he knew growing up here.

“That’s been completely confirmed,” he said.

Over 30 years, his brainchild grew from a small start-up to an international success in the volatile global semiconductor marketplace. Semitool was sold in December 2009 to Applied Materials, an industry competitor with the capacity to expand the company’s markets to huge concerns such as Intel.

Thompson sat down for an interview recently about his purchase of the Sykes’ property and his plan to reopen the restaurant in a few weeks and renovate the remainder of the building to include a grocery or market. As he explained his ideas for Sykes’, Thompson also reflected on his history in the Flathead and its impact on the success of Semitool.

 Born in Iowa, he moved here with his family when he was 4 years old.

“I grew up on Collier Lane west of the dump road (Willow Glen),”  he said. “It was a fabulous place for a young boy.”

Thompson made his way through Edgerton Elementary School, Linderman and then attended Flathead High School. At Flathead, he played in the band and learned invaluable lessons in leadership from instructor Ed Beckstrand who took the band to perform as far away as Calgary.

“We had 185 kids,” he said. “Ed always demanded more of us than we thought we could give. He didn’t dwell on where we fell short. He dwelled on what we achieved that we didn’t think we could.”

Thompson said his father also set an important example for him by working 18-hour days driving a milk truck for Greg’s Dairy. Thompson recalled taking trips with his father to Cut Bank, leaving at 2 a.m. and not returning until late in the evening three days each week.

Thompson’s family left the Flathead Valley when he was 16 to move to Santa Monica, Calif. Although most young people don’t relish leaving before graduating from high school, the move proved fortuitous for Thompson.

“That’s where I met my wife [Ladeine],” he said. “We were both in the band.”

As a mechanical engineer, Thompson started his career working in the aerospace industry for Douglas Aircraft on the third stage of the Saturn V rocket that propelled NASA’s Apollo spacecraft to the moon. He moved on to a position as a design engineer and then chief engineer for a Teflon company with some unique projects.

“We made the slide bearings for London Bridge” in Lake Havasu City, he said.

Through his early career, Thompson said he gained important insights into the American industrial marketplace, including a firsthand understanding of the ups and downs of economic cycles when he was laid off twice in the 1970s.

During both jobless periods, he used his time to take ideas he had from inspiration to designed products that spawned businesses. He created his first company in 1971 then sold it in 1976.

After another layoff in 1978, he created the product that launched Semitool.

According to a company history on the Intertet, it was a horizontal on-axis spin rinser/dryer that removed chemicals from the surfaces of silicon wafers being imprinted with computer chips.

In 1979, he incorporated the company and moved it to Kalispell.

“I came up here with high expectations,” he said. “They more than fulfilled it.”

Thompson recalled that Richie Ostrom, owner of Bell Campers, had a building up for sale. He had an offer substantially below the asking price. Ostrom said he would sell it to Thompson for the same amount — about $65,000.

“I asked him to hold it for one week,” he said.

By the end of the week, Thompson not only had the ability to buy the 7,500-square-foot building, he had a renter at $1,000 a month for all but the few thousand square feet he needed, thanks to Ostrom.

“United Artists wanted to rent it for prop storage for the movie ‘Heaven’s Gate,’” he said.

Thompson moved his little machine shop to the building and soon had a machinist drop by and ask about work.

“I said, ‘I’ve got work for you Jim but don’t quit your day job,’” he said. “I don’t know if this is going to work out.”

Thompson marvels at how far the employees of Semitool took his business. A read through the industry descriptions of the company’s history reveals endless innovation in products with exhilarating highs along with a few devastating reverses in sales.

According to analysts on the Internet, significant dates from its opening here in 1979 include sending products overseas in 1981, doubling manufacturing capacity in 1994 and going public in 1995, then sales plummeting in 1999 with a downturn in the semiconductor industry.

By 2005, profits and financial stablility had returned. Industry experts said one factor was Thompson’s foresight replacing aluminum with copper for the tiny metal line etched on chips for a faster-running chip with lower manufacturing costs.

The industry’s cyclical pattern continued up to the sale of Semitool for $364 million late last year to Applied Materials. At the time, Semitool employed 825 people worldwide with 550 of those at three facilities in the Flathead Valley.

 Thompson maintains that he is given more credit than he deserves for the success of the business.

“I provided two things — an environment specialized for the semiconductor industry and I provided responsibility for all the blame,” he said.

He described his leadership style as having people come in and advise him but then following his own instincts. Thompson told them he would listen to them but they shouldn’t expect him to do what they were telling him to do.

 “That’s why I didn’t do well in school,” he said with a laugh.

According to Thompson, his employees worried far more than he ever did and stepped up to manifest the vision. He said the building was kept meticulously clean as a reflection of the kind of perfection in workmanship needed to build quality into their products.

Thompson said his employees responded and Semitool earned the trust of international concerns such as their largest installation in Dresden, Germany.

“Those people got the job done and got the job done right,” he said. “Because of our isolated location, they don’t really know how good they are.”

Reporter Candace Chase may be reached at 758-4436 or by e-mail at cchase@dailyinterlake.com.