Consolidation: the buzzword in the chip ATE market
After several mergers and acquisitions in recent years, the semiconductor ATE market now is dominated by just a handful of companies, including Teradyne, Verigy, Advantest, LTX-Credence, and Yokogawa.
By Sujan Sami, Measurement & Instrumentation Industry Manager, Frost & Sullivan -- Test & Measurement World, 6/1/2009 2:00:00 AM
The worldwide semiconductor ATE (automatic test equipment) market has witnessed several mergers and acquisitions in recent years. Significant consolidation started as early as 2003 and has not stopped. Some of the key mergers and acquisitions include:
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Credence Systems acquired the assets of SZ Testsysteme in January 2003. The company also acquired NPTest (formerly known as Schlumberger ATE) in May 2004 and merged with LTX in June 2008.
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Teradyne acquired Eagle Test Systems and Nextest Systems in 2008. The company completed the acquisition of Nextest in January 2008 in order to re-enter the memory ATE market, and it acquired Eagle Test in November 2008 to enhance its brand recognition and product portfolio.
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Verigy, which was spun off from Agilent Technologies in October 2006, acquired Inovys in January 2008.
 2008 world market share of the major participants in the semiconductor ATE market. |
As a result of these transactions, the semiconductor ATE market now is dominated by just a handful of companies, including Teradyne, Verigy, Advantest, LTX-Credence, and Yokogawa. The figure presents the market share of major participants in the world semiconductor ATE market through 2008.
In addition to mergers and acquisitions, companies have also been focused on developing and introducing new products for the market. Time-to-market is critical in the semiconductor test market, yet finding ways to keep the cost of test low remains the key challenge.
The world semiconductor ATE market registered revenues of $2.43 billion in 2008, declining at the rate of approximately 33% from the previous year. The downfall started in 2007, with most of the companies' revenues declining year on year.
Market growth expects to be driven by DRAM (dynamic random access memory) and flash memory testers, once the economic recovery begins. Sales of mobile phones, PCs, and other consumer electronics also expect to translate into market growth moving forward.
Some of the key criteria for succeeding in the semiconductor test market are to provide comprehensive testing solutions, reduce the overall cost of test, reduce time to market, and increase production yields. A strong focus on R&D for developing and introducing test equipment that can test ever-more complex devices is also a key factor for success in the market today.
So far, 2008 has been the busiest year in terms of consolidation in the semiconductor ATE market. The consolidations have resulted in increased product portfolios and enhancements of existing products. Our research indicated that by 2013, there will be no more than three or four major competitors left in this market space.
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