Pursuing the Best Moons, Planets, and Stars in the Filtration Galaxy

Th e semiconductor industry is a large and fastgrowing market for filtration products. The ultrapure water needed for washing chips can easily exceed one million gallons per day per line. On site filtration of chemicals requires high quality cartridges. Activated carbon and alumina impregnated filters are used to remove airborne molecular compounds (AMC). High-efficiency air filters (HEPA and ULPA) are needed for general clean space plus mini environments and isolators.

The capability of chips keeps improving as line sizes are reduced. We may be entering a post digital environment. IBM is leading the way with a nondigital chip with 2 nm line sizes but ten times the capacity of a 3 nm digital chip.

A $10 billion research center is being built in NY with support from several chip makers and the state. Intel, TSMC and TI are building state-of-the -art digital facilities in the U.S.

In this fast-moving market the products and market shares are subject to rapid change. The markets themselves are volatile. The U.S. is benefiting from governmental subsidies. Europe is debating a similar strategy. Taiwan, who has the most high-end market now, is risking an invasion from China. Depending on the appetite for risk, the market is either very attractive or scary. It is necessary in such a dynamic market to forecast out 20 years.

Factors impacting the market are:

Market size

Growth rate

Volatility

Suitability

The volatility is a function of the following factors:

Economic

Political

Social factors

Technological

The most profitable market is an aggregation of niches and not a slice of the total. The niches can be viewed as a galaxy with moons, planet systems, and star systems.

The moons can represent markets as small as $1 million per year with 40% market share and 30% EBITDA. They would be part of a planet system which includes multiple moons represent markets of $10 million per year or more.

The arrangement of moons in the planet system is of fundamental importance. They share a common value proposition which can be viewed as the planet itself around which the moons rotate. The moons can be a combination of products, industries and locations which create the value proposition.

These planets systems in turn rotate around a star to form a system. This market can be $100 million or more. The star system is part of a galaxy which can be 1 billion per year or more.

The Air, Water, Energy Universe is more than $1 trillion per year.

The key to 40% market share and 30% EBITDA is selecting the right combinations of moons in the right planet systems.

Using the semiconductor example, the ULPA filter market for a large semiconductor plant is more than $1 million per year and meets the criteria of a moon.

Here is the Semiconductor ULPA filter market based on the world forecast for 2023 as one hundred percent. All numbers on the chart are percentage of this number.

The planet system can be a combination of products, locations, and plants, which combine to represent a market of $10 million or more per year with 40% market share and 30% EBITDA.

Planet systems can be modified continually to reflect market developments. Four large semiconductor plants are being built in the Southwest (Texas and Arizona). ULPA filters are only replaced every four years or so. This is a significant spike in the market. It is therefore desirable to create a planet system for these plants.

The importance of 20-year forecasts increases as you move up the chain from moons to galaxies. You can manipulate moons rather quickly. But changing galaxies is much more difficult.

The best combination of moons rotates synchronously around the core planet which is defined by a value proposition. For example, Camfil, AAF, and MANN + HUMMEL, all offer fan filter units along with HEPA, ULPA and AMC filters. Their value propositions champion the package purchases.

The potential for liberal democracies along with the autocracies is of galactic proportions. Technology developments such as faster non-digital chips also could impact the entire AWE market in a galactic way.

Forecasts should be revised yearly. Planet systems with 10-year forecasts should be revised every six months. Individual planet forecasts should be continually revised and cover at least five years. Individual moon analyses should be continually reviewed and cover the next year.

Filtration opportunities in the world semiconductor industry are substantial but so are the risks. It is not the food industry. But with the proper long-term analyses risks can be minimized.