A New Company, and a New Industry
Cognex founders Robert J. Shillman (seated), Marilyn Matzand Bill Silver in a photo taken for a 2004 Fortunemagazine article entitled, "Heroes of Manufacturing."
Cognex Corporation was founded in 1981 by Dr. Robert J. Shillman, a lecturer in human visual perception at the Massachusetts Institute of Technology. Dr. Shillman decided to leave academia to start Cognex, investing his life savings of $100,000 into the company. He invited two MIT graduate students – Marilyn Matz and Bill Silver – to embark on this business venture with him, offering free bicycles to convince them to leave MIT for a summer. What began as a summer job for Marilyn and Bill turned out to be the start of a career, as they stayed on to help co-found the company. These three individuals gave Cognex its start – and its name, which was derived from the phrase "Cognition Experts".
First Vision System
Cognex’s first industrial OCR reader, DataMan. Cognexfounders celebrated with a champagne toast when the firstDataMan prototype system successfully read its first character.It took the system 90 seconds to read the number “6”.
The company produced its first vision system, DataMan, in 1982. DataMan was the world’s first industrial optical character recognition (OCR) system capable of reading, verifying, and assuring the quality of letters, numbers, and symbols marked directly on parts and components. Cognex’s first two customers were manufacturers that used DataMan to read numbers laser-etched on nuclear fuel rods and on semiconductor wafers.
Cognex was one of the earliest companies in a market that was soon crowded with competitors, all intent on securing a position in the new field of machine vision. In these early years, machine vision generated great excitement as part of the “robot revolution.” People believed that machine vision would revolutionize not only manufacturing, but even areas as diverse as transportation and household chores. The reality was not to be as easy…or come as soon….as predicted.
Cognex received one of its first patents for Search, a powerfulsoftware tool that dramatically improved machine visionperformance by enabling quick, accurate location of patternsin gray-scale images. Cognex now has a portfolio of more than250 patents for advances in machine vision technology.
Despite a growing list of customers using Cognex vision, serious challenges soon became apparent in the company’s business model. Implementing a vision application in these early years required computer programming knowledge, and users demanded considerable support.
In addition, factory conditions were unpredictable. Early systems often did not perform reliably outside of development laboratories, where factors like lighting, reflections and shadows could be controlled. Misperceptions about what vision could realistically achieve combined with poor reliability in factory settings resulted in many vision companies spending too much time supporting customer applications. As a result, Cognex...and every other company that had entered the vision business... was losing money.
In 1986, Cognex made a major technical breakthrough that helped solve the problem of system reliability. Cognex co-founder Bill Silver developed a powerful software tool called Search that could locate patterns in gray scale images very quickly and accurately, and succeeded in dramatically improving the results that users could achieve with their vision systems.
At the same time, Cognex launched a new business strategy that helped ensure the company’s survival and subsequent market leadership.
That strategy was to develop and sell standard machine vision hardware and software products to original equipment manufacturers (OEMs), who could integrate machine vision into the manufacturing equipment they sold into factories. These OEMs had engineers on staff with the expertise to program the vision applications, and who then supplied end-users with equipment that had the vision already built in.
This combination of superior technology and new business direction provided the winning recipe that would help Cognex succeed and grow, while the majority of other early vision companies soon failed or got out of the business.
Cognex Founders Dr. Bob Shillman, Bill Silver, and MarilynMatz (center) recieved the 2005 SEMI award in recognition oftheir technical contributions to semiconductor manufacturing.
As an OEM supplier, Cognex began looking for markets where machine vision provided a critical competitive advantage. Cognex found that market in the semiconductor and electronics capital equipment industry.
This industry had already recognized the value of machine vision to help improve yield, maintain the integrity of clean rooms by eliminating human handling of fragile semiconductor components, and to decrease the size of circuitry, resulting in more chips per silicon wafer.
Many capital equipment makers had their own in-house vision development groups. However, Cognex’s focus and expertise in machine vision helped them provide technology that was much more effective than the OEMs’ home-grown solutions.
Cognex quickly became the leading supplier of machine vision to semiconductor and electronics capital equipment makers, who integrated Cognex vision into many types of machines used to make semiconductor chips and printed circuit boards.
Throughout the 1990’s, Cognex worked with these customers to push the boundaries of machine vision-aided manufacturing. Cognex developed ever more capable vision algorithms to meet the demanding speed and performance requirements of its semiconductor and electronics customers...and with Cognex’s help, vision migrated into more and more stages of the manufacturing process.
Today, machine vision is essential in virtually every step of semiconductor manufacturing, and the large majority of these applications were developed by Cognex engineers. In 2005, Cognex founders Dr. Robert J. Shillman, Bill Silver and Marilyn Matz were honored by Semiconductor Manufacturers International (SEMI) with the 2005 SEMI Award, in recognition of their important technical contributions to semiconductor manufacturing.
Cognex Becomes a Market Leader
In 2004, Cognex was invited to open trading at Nasdaq incelebration of its 15th year as a publicly-traded company.
Cognex's OEM-focused strategy paid off. In early 1987, the company became profitable for the first time in its history. Cognex went public on the NASDAQ exchange in 1989, at $1.38 per share. Within one year, the stock price had tripled.
Cognex set about growing its business in this period by expanding internationally.
In 1989, Cognex opened its first international office in Munich, Germany. In 1990, Cognex established a Tokyo-based subsidiary, Cognex KK, to serve the company’s rapidly growing business with large semiconductor and electronics capital equipment makers in Japan. Today, Cognex has offices throughout North America, Europe, and Asia to serve its worldwide customer base, and hundreds of distributors around the world that carry Cognex products.
In 1995 the company also made the first of many acquisitions when it purchased Acumen, a U.S. based developer of wafer identification equipment for the semiconductor industry. Acquisitions have played an important role in the company’s growth, and enabled Cognex to enter new markets for machine vision.
Expanding the Machine Vision Market
In 1999, after 18 years in business, Cognex celebrated the shipment of its100,000th vision system. By 2003--just four years later--the companyhad already hit the 200,000 milestone.
In the mid-1990s, Cognex turned its attention back to the end user market that had proved so elusive in its early days. To do this, Cognex concentrated on developing new vision products that could be easily used by factory floor technicians with little or no training.
In 1994, the company introduced Checkpoint®, a PC-based vision system designed specifically with end-user customers in mind.
In 2000, Cognex took end-user vision a giant step forward with the introduction of In-Sight®, a system that combined camera, processor and vision software into a single compact unit about the size of a cell phone. In-Sight dramatically improved the ease with which factory floor technicians could configure a vision application by replacing programming altogether with a simple “drag and drop” interface that mimicked common business spreadsheet programs.
Also launched during this time was the ultra-simple single purpose Checker® vision sensor, designed to compete with photoelectric sensors for applications such as presence/absence detection. And, in 2004, Cognex introduced its first handheld vision product—an ID code reader called DataMan. The new product was named DataMan in honor of the company’s very first vision system, which was also designed for ID applications.
These important advances in function and usability, combined with the decreasing costs of implementing machine vision applications, helped dramatically increase acceptance of machine vision in general manufacturing.
While semiconductor manufacturing remains an important market for Cognex vision, today the company receives a greater portion of its revenue from general manufacturing applications in areas such as pharmaceutical, automotive, healthcare, packaging, aerospace and consumer products manufacturing.
21st Century Vision
Cognex founder Dr. Bob Shillman with an early Cognex test system.
Today’s Cognex DataMan 100 fixed mount ID reader packsmuch more functionality into a much smaller package.
Today’s vision systems have come a long way since the first DataMan system was developed in the early 1980s. The functionality and user-focused design now available to Cognex customers is the result of thirty years of hands-on experience developing new vision technology and solving the industry's most challenging vision applications.
Today, Cognex retains its focus as a company of “vision experts.” The company continues to investigate new ways to improve performance of industrial machine vision, while also exploring new markets where vision can provide a competitive advantage.