Zygo, IBM to Terminate AFM Distribution

MIDDLEFIELD, Conn., Mar. 30 -- Zygo Corp. and International Business Machine Corp. (IBM) have agreed to terminate a distribution agreement to market and sell atomic force microscope (AFM) products. Under the terms of the agreement, Zygo has been granted a nonexclusive license to IBM's AFM technology for the next three years; the company may continue to license the technology for additional terms thereafter. Zygo has entered into an additional agreement with a third party to support and service AFM products previously sold by Zygo.
In announcing the termination of the distribution agreement, J. Bruce Robinson, Zygo's CEO, said, As we marketed the AFM products it became clear that it would be many years, if ever, for the AFM technology to gain broad acceptance as a production line yield improvement tool. When IBM advised us that the manufacture of the AFM product was no longer strategically viable for them, we jointly agreed to disband the distribution agreement. We are, however, pleased to have the technology available to us, since we believe there may be applications for its use in combination with other Zygo metrology technologies and in nano-machining applications. There will be very little impact to Zygo's short-term financial performance as a result of this action.