Rodel becomes model of success

The Newark firm has made itself a leader in computer-chip manufacturing. Its presence may lure other high-tech firms to Delaware.


By Dale Dallabrida
The News Journal
June 29, 1997

Inventor Bill Budinger, a former DuPont Co. marketer, didn't hit the big time with high-tech golf clubs. Ditto his puncture-proof bicycle tires, or the Hickey Pickers synthetic rollers that lifted dirt off printing-press plates.

But the garage-based company Budinger launched in 1968 struck gold after a tough first decade, coming up with a better way to make computer chips.

"We were in on it at the beginning. Now, it's a standard process," said Lee Cook, Rodel Inc.'s vice president of research and development. "Everybody has to have it."

Indeed they do. Rodel's sales may pass $200 million this year, at a growth rate nearing 40 percent. Earlier this month, Philadelphia chemical heavyweight Rohm and Haas Co. bought a 25 percent stake in the company. And state officials hope the Newark-based success story will help attract more high-tech companies, bringing a wave of new jobs as the state's banking boom did.

The business isn't a simple one. Like many Rodel employees, sales manager Dan Koharko has a tough time explaining his work to strangers. "They'll say, 'Oh, yeah. My brother-in-law fixes computers too,'" he said.

But Rodel's 780 employees – including 500 in Delaware – don't fix computers, or build them, or even make computer parts.

They make felt.

This is no pool-table covering. It's designed by engineers and chemists, made under some of Rodel's 150 patents worldwide, and cut to fit machines that grind out computer chips, or video screens, or hard drives.

The fabric pads fit onto the high-tech disk sanders that polish silicon, glass or metal to a precise smoothness measurable in molecules. Rodel also makes slurries – gritty soups that act like Soft Scrub cleanser, to wear down the surface being polished.

For instance, consider the wafers sliced like salami from logs of silicon, on which clusters of computer chips are built, layer by microscopic layer. Whirling pads wet with slurry smooth the saw blade's gouges out of the silicon, preparing the surface for wires narrower than germs.

This is one area of several in which Rodel leads a small crowd of competitors: Four-fifths of the raw silicon wafers shipped to semi-conductor makers are polished with Rodel pads and slurries, industry sources say.

It's an industry in which Rodel grabbed an early lead and hung on doggedly. "They have about 80 percent of the pad market. They make a damn good pad, and they've been making pads for a long time, said Chuck Picardi, director of technology at competitor Moyco Technologies Inc. in Montgomeryville, Pa.

The company seems poised for even greater growth. Makers aim for chips that are smaller and more powerful; to hit that target, they need even more precise polishing processes.

Rodel specializes in supplies for the process called chemical-mechanical processing, or CMP. It's one of the fastest-growing areas in the otherwise roller-coaster semi-conductor business, said analyst Ron Dornseif of Dataquest Inc. in San Jose, Calif.

Dornseif sees sales of CMP machines growing almost 40 percent a year, from $175 million in 1975 to nearly $1.2 billion in 2001. "It's a new technology that's becoming pervasive," he said.

"Rodel is squarely in the center of the hottest growth area in the semi-conductor process," said Christopher F. McConnell, chairman of CFM Technologies Inc., which makes equipment for chipmakers. Rodel helped the West Chester, Pa., company make its first sale six years ago; CFM is now headed for annual sales of $85.7 million.

Rodel works with most major chipmakers, such as Intel, Motorola, IBM, Samsung and Hitachi. "And once the majors get a process that works, they don't change it," said Allen Barnett, president of Newark-based AstroPower Inc., which makes silicon-based solar cells.

For some products, "they're as close to the only game in town as you get," McConnell said.

Chipmakers spend lots of money testing vendors' products before they buy. And most have settled on the suppliers they'll be sticking with: "The train has left the station," Moyco spokesman Joseph Sternberg said.

So the suppliers who already have a seat on the train are beefing up to handle the anticipated boom. Moyco, a $12-million-a-year slurry maker, is looking for investors. "We're going to have to be prepared," Sternberg said. "We're going to need the financial capability to support that business."

Rodel already has found a source of growth capital. Rohm and Haas, a $4-billion-a-year company, wouldn't disclose what it paid for its 25 percent stake in Rodel, though the chemical company said it would sink a combined $75 million into Rodel and another electronics manufacturing supplier.

"I can think of no better way to enter the fast-growing CMP segment than through the market leader," vice president Richard C. Shipley said.

In turn, Rodel gets a shot at some of Rohm and Haas' customers – and the cash to fuel its growth. "Now, we can hire the people we desperately need for manufacturing. We need to get product out," spokeswoman Melissa Singleton said. The company may add 200 jobs in Delaware in the next 12 months.

Rodel may go public, but not for at least four years, Budinger said: The company is constrained by a buyout agreement it made with an early investor.

State development officials are touting Rodel's story to out-of-state manufacturers, as part of a drive to attract chipmakers and other high-tech employers.

"It gives an indication to semi-conductor firms that there is related expertise in the state," said Robert W. Coy Jr., director of the Delaware Economic Development Office. "And it gives them a higher level of comfort to know that someone they know is there."


Company's success
fueled by its culture

By Dale Dallabrida
The News Journal
June 29, 1997

It isn't just technology driving Rodel Inc.'s dizzying growth

"If I had to pick one thing, I would say it's our culture," founder Bill Budinger said.

It's a company culture that prizes teamwork, engineered by Budinger and his brother Don. In the early '90s, the Budingers saw the company threatened by fast-growing, competitive Asian newcomers.

"If we didn't transform ourselves to the next level of performance, we wouldn't be around," Don Budinger said.

The Budingers' charter for change was the Rodel Way, a company creed of eight guiding principles.

"Speaking straight" is one. "We train people to be straight. We absolutely require it," Don Budinger said.

Underlings at some companies might sugar-coat bad news to management. But at Rodel, "bad news is more welcome than good news because it's more instructive," he said.

Another tenet of the Rodel Way: "Being there for each other."

For example, take Dave Murphy, a "team leader" managing a group of 19 factory workers.

He keeps the work on schedule, troubleshoots production glitches, and assigns tasks to his team. But in addition, "I take the garbage out for them," he said.

That means picking up and hauling out the felt scraps so that workers can keep cutting pads uninterrupted.

"They don't want to stop going," Murphy said. "And I don't want them to."

The tenets of the Rodel Way are instilled through training programs and reinforced at sitewide meetings. Once a month, Rodel shuts shop for an hour so employees can share news and air gripes. "It's a forum for us to practice what we preach," said Budinger, who flies in from the company's satellite site in Phoenix, Ariz.

"Sharpening the saw," he calls it. "As painful as it is, you've got to stop sawing" to focus on goals.

At competitor Moyco Technologies Inc. in Montgomeryville, Pa., director of technology Chuck Picardi tips his hat to the Budingers' teambuilding. Owners of privately-held companies often have a tough time delegating decisions to teams, he said: "That's why it's such a significant mindset change for Rodel."

At CFM Technologies, a West Chester, Pa.-based equipment manufacturer for chipmakers, Chairman Christopher F. McConnell likewise credits the Budingers' leadership. "They believe that the fuel for success is through the success of each employee, and that's how the company grows and thrives," he said.

"It's not artificial, it's not just talk," McConnell said. "And employees sense that."