Orbotech

Two companies and the founding of Orbotech

Orbotech's roots are in Optrotech, which was incorporated in Israel on 8 February 1981. Shlomo Barak founded it with Elron's backing to develop optical inspection systems for the electronics industry. Orbot, the company that competed with it, grew with the backing of Ormat. On 27 October 1992 Optrotech bought Orbot's shares and changed its name to Orbotech. The merger brought together two development and marketing operations that worked in the same field and served electronics manufacturers around the world. The IVC database lists Shlomo Barak, Hanan Gilutz, Kobi Richter, Yochai Richter and Shimon Ullman as founders. This list should be read in the context of the two original companies that merged, not as a new joint founding of the merged company.

Milestone: automated inspection on production lines

Optrotech and Orbot were pioneers of automated optical inspection of printed circuit boards. Optrotech beat its competitors to market with the Vision 104 system, its first product. According to KLA, Orbotech was also first to market in optical and electrical testing of flat panel displays. According to research by Dan Breznitz, Optrotech and Orbot together controlled 85% of the world market in their niche at the end of the 1980s. The systems made it possible to find defects on electronics production lines and to move from human inspection to a computerized process, which helps increase the number of good units leaving the factory.

What the systems inspected and made

Orbotech's systems are designed for printed circuit boards and flat panel displays. They check the structure of the circuit, find defects, and also allow testing and repair at different stages of display production. The business expanded beyond inspection: direct imaging of patterns, laser drilling and tools for semiconductor manufacturing processes. In a 2010 presentation the company reported 9,000 installations for printed circuit board production and 1,400 installations for flat panel display production. The installations were part of customers' production lines and served repeated inspection of components in every production cycle. The systems work at the manufacturers before the components reach the phone, the computer or the screen. Camtek also began in automated optical inspection of printed circuit boards, in 1987; it sold that business in 2017 and became a semiconductor-only company.

Trading and the sale to KLA

Optrotech went public on Nasdaq in 1984; Orbotech's shares later traded under the symbol ORBK. The agreement for KLA-Tencor to buy the company was announced on 19 March 2018, and the deal was completed on 20 February 2019. Shareholders received $38.86 in cash and a quarter of a KLA share for each Orbotech share. At the announcement, the equity value of the deal was estimated at about $3.4 billion; because part of the payment was in KLA shares, the value changed with the share price, and in the merger documents KLA reported total consideration of $3.254 billion. The company came under KLA's control, and its equipment and know-how were merged into the buyer's product portfolio.

Legacy

Orbotech's technological legacy continues in KLA's equipment for making and inspecting electronics. The Discovery II family carries the Orbotech name and is designed for optical inspection of printed circuit boards. The specification describes detecting shorts, open conductors, missing and excess material, along with stations for defect verification and repair. The systems combine imaging and image processing with analysis of the circuit's structure to identify defects and help verify them. The acquisition expanded KLA's business into printed circuit boards, displays and other manufacturing processes. Orbotech's contribution is the ability to see small defects and to connect an inspection finding with production and repair decisions in the factory.