Vendor relationships turbocharge rebound for Silicon Quest

Silicon Quest International came roaring out of the two-year downturn in the semiconductor industry and expects to post a sales gain of at least 20 percent this year.

The secret of success for the silicon-wafer company? Paying just as much attention to its relationships with vendors as it pays to its relationships with customers.

"Vendors can make or break your business by giving you just the slightest preferential edge," says Richard Mee, president of the company that is steadily moving its headquarters to Reno from Santa Clara, Calif.

The edge that a vendor provides needn't be limited to price.

Equally important,Mee says,might be a break on delivery times.

Or a technological break.

The importance of those relationships was born out once again for Silicon Quest International as demand for silicon wafers, a building block for semiconductors, spiked this year.While other suppliers scrambled to fill customers' orders, Silicon Quest grabbed market share.

At the same time,Mee says, Silicon Quest has worked hard to add value mostly through additional services to distinguish itself in a business that essentially sells a commodity item.

"We took advantage of the downturn to reinvent some products and go after new markets," he says.

The silicon wafers sold by the company range from a few inches to about a foot in diameter.

Silicon Quest takes raw material and processes it polishing its surface, for instance, or rounding its edges.

Ultimately, semiconductor manufacturers fabricate integrated circuits on the wafers, which are cut up to create the chips used in electronic systems ranging from game consoles to computer servers.

Initial processing on many of the wafers sold by Silicon Quests is handled by its Reno facility.

Final manufacturing is overseen by about 40 employees at Santa Clara.

Mee says the primary manufacturing operations likely will remain at California even as Silicon Quest continues to move its headquarters operations sales, marketing, human resources and the like to Reno.

The company has been a presence in northern Nevada since 1999, when it moved a subsidiary from Phoenix to Sparks.

Mee and other executives had been looking for locations in Central California.

But workers compensation costs in the Golden State which Mee says were unmanageable even five years ago drew the company's attention to northern Nevada.

Growth of the northern Nevada operation was slowed dramatically by the tech collapse of 2000 and 2001.When Silicon Valley imploded, Silicon Quest found it could lease manufacturing space inexpensively in northern California.

Today, principals of the company own a 66,000-square-foot building in west Reno which houses Silicon Quest along with other tenants.As the company moves more operations to Nevada, it ultimately might fill as much as 30,000 square feet of the building.

Silicon Quest employs about 15 people in Reno.

In recent months,Mee says, the company has faced some headaches finding semiskilled machine operators in the tight labor market in northern Nevada.

"There's not a lot of pool to pull from," he says.

Even though northern Nevada doesn't have the technology infrastructure that surrounds Silicon Quest's California operations, Mee says the company has managed to find the suppliers and services it needs in the Reno area.

The company is looking to deepen the technology infrastructure,meanwhile, with involvement by its employees in organizations such as a local chapter of the Optical Society of America, a group of professionals involved in photonics and optics.