Rx for troubled ATE business

What must be done to revive the troubled automated test equipment field? Agilent Technologies' Tom Newsom suggests that one key element is keeping costs under control.

T&MW: Do you see any signs of a turnaround in the ATE business?

Newsom: The signals are still mixed. I'm encouraged that overall chip units are up significantly over the last 12 months, and Agilent has seen an uptick in the system-on-chip (SOC) business in recent months. After almost two years of very low-level purchasing for added ATE capacity, companies are beginning to build capacity. However, companies are managing their cash very closely and are very careful with their investments. Long term, it is the increase in semiconductor production that is the most important contributor to a rebound, and people haven't given up on semiconductors as one of the keys to a better life.

T&MW: What are some of the brightest application areas for ATE?

Newsom: The single hottest area we've seen in 2003 is the move to the 2.5 G cellular phones, such as picture phones with built-in camera, the programmable ringer phones, and the Web-surfing phones. Also fast growing are wireless local area networks and, moving into 2004, high-speed bus applications, such as the PCI Express and HyperTransport buses. Still another good growth area is chips for optical storage. The amount of data to be stored doubles every year.

T&MW: What are the chief lessons that the ATE industry should take away from the slump of recent years?

Newsom: This industry has always been cyclical, and my opinion is that the cycles will become even more pronounced because of such factors as subcontracting and the consumerization of many devices. When hot applications are developed, they happen fast and big, so the industry ramps up to meet the demand—only to suffer downturns later. It is all about managing the supply chain to respond faster to the upswings, while minimizing the impact of slowdowns.

In ATE, one of the ways we cope with these cycles is to have fewer and more common components. That is one of the reasons why Agilent uses a single, scalable platform—the 93000—for our SOC business. Our chip-manufacturing customers value this approach because in an upturn they can rapidly add capabilities to their existing machine, while in a downturn they can reconfigure it for lower capacity. In short, our industry needs to adopt flexible systems that will allow it to better cope with the inevitable cycles.

T&MW: How important is driving down the cost of test to a healthy ATE industry?

Newsom: Cost is definitely important—perhaps second only to quality. Having a single, scalable platform, I believe, is our number one tool in keeping test costs in line. As one customer told me: "The most expensive test machine I have is the one over there in the corner collecting dust." You also need a platform that has a long, useful life—seven to 10 years.

Another vital step in cost control is the move to test systems that allow you to test multiple functions on a chip concurrently, which reduces overall test time. Finally, we need to make continued strides in developing true design-for-test software tools. One of the big breakthroughs that we support is the proposed core-based test language (CTL), which is essential for automatically generating test programs.