All along the equipment supply chain, from front end to back, one common theme emerged from the 33rd annual Semicon West: fab and equipment utilization rates were up, but they weren't triggering volume orders like they have in the past. At best, customers were adding capacity incrementally, ordering one or two tools or a handful at best.

Which is perhaps why an Agilent Technologies Inc. order win from test and assembly house ASE Group fomented a lot of chatter on the show floor.

On the first day of the backend portion of Semicon West earlier this week, Agilent announced that ASE purchased 25 93000 SOC test systems (93K). At several million dollars a system, depending on the configuration of the scaleable tester, it is no small capital investment for ASE.

The Taiwanese subcon now has the largest installed base of 93Ks of any one customer, Agilent said. The order has sent the installed base of the tester to more than 550 systems worldwide, according to Agilent.

But Agilent wasn't the only ATE to benefit from ASE's capacity expansion. Rival Teradyne Inc. also announced prior to Semicon West that ASE's test subcon subsidiary had placed orders for multiple Tiger and Catalyst SOC testers. Catalyst was Teradyne's first SOC tester, and the company now has an installed base of more than 1200 systems. Tiger is a souped up version of Catalyst, offering higher digital pin counts and faster data rates.

Teradyne also announced earlier this week that Asian test and assembly subcon ASAT Ltd. also placed an order for multiple Catalyst testers for high volume production of multimedia and wireless devices.

While anyone is happy to sell anything these days, Teradyne is particularly happy about the Tiger orders. When the ATE giant rolled it out a couple years ago, many in the industry questioned the wisdom of such a large, powerful – and in terms of initial, up-front costs, expensive – tester. Teradyne got beat up by many analysts and others within the trade press.

"Tiger is digging in," said Phil Smith, strategic marketing manager for Teradyne's chip test division. The company booked some 50 Catalysts in the June quarter, and 20 Tigers, and Teradyne is feeling vindicated where Tiger is concerned, Smith said.

Communications chipmaker Marvell Technology accounted for some of those Tigers in the last quarter. Marvell, incidentally, is one of ASE's bigger customers.

All these orders for multiple systems have made the industry sit up and take note. While everyone reports that chipmakers and subcons are reluctant to add capacity, others worry that the industry is under investing in capacity, and that this could lead to a steep and problematic ramp within a few quarters.

Test and assembly subcon Amkor Technology COO Jon Boruch suggested yesterday during an Amkor analyst meeting that the subcons had learned their lesson about adding too much capacity ahead of demand. And yet he acknowledged that his subcon competitors seem to have begun making large capacity buys, citing the ASE/Agilent order.

How Many Ways Can You Say "Cautiously Optimistic?"

Assembly and packaging orders are growing as well. Assembly equipment giant Kulicke & Soffa Industries Inc. for example reported earlier this month that it had signed a volume purchase agreement for Maxum wire bonders. Then on the first day of the backend portion of Semicon West, K & S announced an order for 70 Maxum ball bonders from Taiwanese subcon Siliconware Precision Industries Co., Ltd.

Not even these types of orders are enough to make people declare that the long delayed upturn has finally arrived. But it is providing rays of light within the gloom, as everyone hopes that this activity will spread to front-end equipment suppliers and presage an upturn.

"There is lots of hope, but more importantly a lot of uncertainty," noted Jack Trautman, VP and GM of Agilent's automated test group.

Visibility is getting a little better as product lead times are stretching out somewhat in the wake of order backlogs, reported Stephen Kay, director of product marketing for Ultratech Inc.'s packaging business.

Kay wouldn't go so far as to say the upturn is around the corner, but rather like everyone here this week, remained cautiously optimistic. "I will say things are looking much better than they have for the last couple of quarters," he said.

Long-time equipment industry vet and CEO of ATE vendor Credence Systems Corp. Graham Siddall suggested that while the indications were there that an upturn is coming, it still may be several quarters away. While backend business is improving, which is often cited by Wall Street as a reason for its bullishness, the business had nowhere to go but up.

"The backend was beaten down a lot more than the front end … we're coming up from a lower level," Siddall suggested. Test and assembly orders are only just now starting to return to order growth rates any where near historical norms, he observed.

"Clearly things are getting better. But I still don't see a return to the boom," Siddall said.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved