Despite strong electronics sector, Ibis shares plunge

Last year was a pretty good one for many companies that make equipment used in manufacturing microchips for computers, cellphones, and other electronic equipment.

Not so for Ibis Technology Corp. of Danvers. The company's shares fell 81 percent from March 2004 to March 2005, making it the worst-performing stock of any publicly traded company in the state.

It's the price Ibis paid for stumbling along a pioneering path. The company makes ion implantation machines, the complex devices that blast atoms of various chemicals into the silicon wafers from which chips are made.

It can be a great business. Varian Semiconductor Equipment Associates Inc. of Gloucester also makes ion implanters, and it ranked second in the Globe 100.

But Ibis does things differently from Varian. Instead of the usual boron or arsenic ion blasters, Ibis makes machines that bombard the silicon with oxygen, in a process called separation by implanted oxygen, or SIMOX. The implanted oxygen acts as an electrical insulator, a process called ''silicon-on-insulator" that produces chips which can run faster while using less electrical power than conventional chips.

Ibis' chief rival, Soitec of Grenoble, France, uses a more complex method to make silicon-on-insulator wafers. According to Bill Ong, an analyst for American Technology Research Inc. in San Francisco, the Ibis approach theoretically makes more sense. ''If you can get the process right, eventually it becomes a cheaper, more elegant process," Ong said.

The trouble is that Ibis hasn't gotten it right. The company has managed to sell just one of its $8 million SIMOX machines in each of the past two years, though Ong estimates that it must sell three a year just to break even.

Ibis executives refused to talk to The Boston Globe. The 2004 loss of $1.02 a share is an improvement from $2.21 in 2003, but the company posted a first-quarter 2005 loss of 25 cents a share. And in what Ong called a ''very telling" move, chief operating officer Gerald Cameron resigned in April. ''That tells me they're not going anywhere," Ong said.

Hiawatha Bray can be reached at bray@globe.com.