Founder and CEO Mike Simmons has built a manufacturer of capital equipment with an eye on automation, customer service, and innovative design.
Simmons worked as a mechanical engineer in the thin-film industry before striking out on his own with Intellivation. “I always wanted to have my own business,” he says. “I just one day decided the time was right to do it.”
A dozen years later, he’s staked out solid market share manufacturing thin-film coating equipment. “It’s very much a niche technology,” he explains. “We manufacture roll-to-roll vacuum thin-film coating machines.”
These films are so thin that an 80-pound roll can measure 10 miles in length. “These thin coatings are in products we use every day from energy-efficient windows to flatscreen TVs to phones to food packaging — all kinds of things that we all use every day,” says Simmons.
A bag of potato chips is a good example. “The plastic is really not effective at blocking water vapor and oxygen,” says Simmons. “Those are things that spoil food, so potato-chip bags and other food packaging have these coatings on the plastics to reduce permeation of [water and oxygen] and extend shelf life.”
Intellivation roll-to-roll (R2R) doesn’t cater to food packaging, however. Manufacturers of a wide range of high-tech products buy the company’s machines for use in their own manufacturing; most are based in the U.S. “They could be Fortune 50 companies, they could be startups,” says Simmons. “These can be things like flexible electronic devices, flexible circuits, medical devices, there are defense applications, batteries. There’s really a pretty broad spectrum.”
Intellivation’s coating machines — which range in weight from 5 tons to 40 tons — “are basically all custom made,” says Simmons. “Every machine ends up being a little different. . . . Every customer is making a different product, so the exact configuration that makes that product efficiently is a little bit different.”
Lead times can stretch beyond a year for large machines. “These are really complex machines,” says Simmons, noting that each unit includes more than 600 unique components. “It takes us basically at least six months to build one machine.”
Beyond complete R2R systems, Intellivation also sells planar magnetrons, thermal evaporation, and other subsystems. “Some companies that also manufacture this type of equipment buy a lot of those items from third parties,” says Simmons. “We are unique, especially for a company our size, in that we do those things in-house as well.”
Simmons moved Intellivation from Tucson, Arizona, to Fort Collins, Colorado, in 2012, then more than tripled the size of its facility with a move to Loveland in 2020. “I just really like the area here,” says Simmons. “My customers are almost never near me, so I can be located anywhere. I wanted to be near a large airport — I wanted to travel efficiently — and I enjoy the mountains and the seasons and all of that.”
Intellivation has an in-house machine shop and welding capabilities at its new, 21,000-square-foot, purpose-built facility in Loveland, allowing for a notably vertical manufacturing process. “We really needed to be in a purpose-built facility to operate as efficiently as possible,” says Simmons. “We’ve got high ceilings here — 21-foot minimum clear ceiling height — it’s all set up for overhead cranes, and we’ve got a good flow for everything.”
“It all starts with the engineering side,” says Simmons. “Next, it heads out to our machine shop and weld shop. We are able to make just about all of the parts in-house up to about 20-inch web machines. We have CNC machining centers and we just recently purchased a really large lathe so we can turn the large rollers that are used in these machines in-house, which we are excited about.”
The machines’ steel frames and vacuum chambers are likewise welded by Intellivation’s employees, and parts undergo post-processing before going into the final assemblies. “We’re changing setups all the time to run these different parts,” says Simmons.
Differentiators include an “innovative design” with a smaller footprint than the competition and allows for easy maintenance. “We also have a really high level of automation in our machines,” says Simmons. “They run completely unattended. The sky’s the limit, but it’s not uncommon to have a roll that takes three days, four days to run.”
He adds, “We’re able to run many different tweaks to a recipe, and we can run through all of them in a short period of time because of our automation. Online in the machine, we have sensors that measure the performance of the coating. So it really accelerates the process development cycle and reduces time to market. We’ve been able to help customers in that way in particular.”
Clients also can utilize Intellivation’s internal applications development lab to test specific applications while in the design or manufacturing phases. “That has one of our machines permanently installed,” says Simmons. “We’re able to do proof of concept and help people develop things prior to buying their own machine. . . . Giving them the ability to come in here and do that work right away is really helpful to them.”
Challenges: Feast or famine. “Those are absolutely the big challenges in the capital equipment business,” says Simmons, noting that Intellivation makes “just a few” machines each year. “It’s never smooth.”
He says being conservative with cash flow and avoiding debt help mitigate the effects, and the applications development lab helps fill in some gaps. “That’s a service revenue stream, which helps with the hills and valleys of the capital-equipment side of the business,” says Simmons. “We also provide service on our equipment’s install base.”
Another challenge: “We have many customers that are thrilled with us that don’t want anybody to know it,” says Simmons. “They don’t want their competitors to work with us.”
That means customer awareness can be difficult to raise. “It is definitely something we have to work on, because I’m a mechanical engineer by training, not a sales and marketing guy,” he explains. “It is one of the things we’ve been trying to put more effort into.”
Opportunities: “Flexible circuits, flexible electronics, medical devices, and batteries are the top growth areas right now,” says Simmons.
Needs: “Hiring a qualified workforce has been a challenge,” says Simmons, citing ongoing needs for machinists, technicians, and engineers. About 75 percent of Intellivation’s employees work in production, he notes. “We prefer to hire locally when it’s a possibility, but we get candidates from all over.”
Since upgrading from 6,500 to 21,000 square feet in 2020, space is no longer a need. “It’s a big piece of land, so we’ve actually designed in the ability to expand to about 45,000 square feet,” says Simmons. “My hope is to not need to move again.”