Semiconductor Test : DFT : News : Trends : Technology : Commentary THE FINAL TEST REPORT FTR Vol. 20 No. 11 November 2009 Memory Chip Sales Climb – But Memory Tester Sales Fall T he global DRAM market has finally begun to improve after declining annually since 2007. According to iSuppli, DRAM revenue decreased by 7.5 percent in 2007 and 25.1 percent in 2008. And, despite a strong recovery in the second and third quarters of this year, the weak conditions in the first quarter mean that global DRAM revenue will to decline by 12.9 percent in 2009, according to its preliminary estimate. However, it says that the DRAM industry will continue to rebound in 2010 and beyond. Global average selling prices (ASPs) for DRAM rose by 21 percent in the third quarter following a 19 percent increase in the second quarter, according to iSuppli. The second quarter marked the first sequential increase in DRAM pricing since the fourth quarter of 2006, the firm said. It estimates that global DRAM revenue was up 35 percent sequentially in the third quarter, following a 34 percent sequential increase in the second quarter. DRAM demand is expected to improve in 2010 with the general global economic recovery. 1.5 FTR INDEX 0.91 1.3 1.1 0.9 0.7 0.5 Oct 2006 Apr Oct 2007 Apr Oct 2008 Apr Oct 2009 FTR' FTR'ss index of ATE, chipmakers, and PC makers vs. the Dow-30, tumbled in October as investors again moved away from chip-related stocks. iSuppli said, “Improved thirdquarter earnings from Samsung, Micron and the Taiwanese DRAM makers point to increasing sales and further progress toward profitability,” said Mike Howard, iSuppli senior DRAM analyst, in a report released last month The FLASH memory market is already changing from a situation that favored buyers to favoring NAND suppliers over the next few years, according to IC Insights’ in its mid-year update to the McClean Report. Unit shipments and bit volume demand is set to increase but there has been a declining investment in FLASH memory manufacturing capacity for a couple of years now. IC Insights expects that in 2009 capital expenditures dedicated to FLASH memory will fall to about $3 billion – just 25 percent of what it was in 2008. Continued on page 2 iNSIDE iNFO Page Another TAP Co. is Gone! 3 Global Billings Report 4 Chip Equipment B/B 4 Who Will Be No.1 in 2018? 5 TAP Co. CQ3 Reports 6 Focus On — Electroglas 7 Products — LTX-C IMA 8 Optimal Enhanced S/W 9 ADV Sales up 46% QoQ 10 So Few Pins 11 Freddy’s Test Report 12 COPYRIGHT 2009 by IKONIX Corporation. All rights reserved. Photocopying copyrighted material is a federal offense. No part of this report may be reproduced, in any form, without the written permission of the Publisher. Editor: J. Mulady THE FINAL TEST REPORT is published by IKONIX Corporation, P.O. Box 1938, Lafayette, CA 94549 USA. Tel:925-939-7909 Fax: 925-906-9427 e:mail: ftr@ikonix.com. Subscription rates and a sample issue are available upon request. Vol. 20 No. 11 Continued from page 1 IC Insights says the volume of NAND FLASH memory unit sales is set to increase 2009 despite the economic challenges. Driven by demand for handheld and wireless consumer, computer and communications devices FLASH bit volumes increased by triple-digit figures between 2005 and 2008. FLASH bit volume is forecast to increase by 83 percent in 2009 and is expected to double each year through 2013. However, it also notes that, “No significant expansion of CAPEX spending plans has been announced for 2010. The resulting rise in ASPs is set to last well into 2012 as it will take approximately a year for any capacity expansion to be brought on-line.” However, there is no sign that the brighter outlook for DRAM and NAND makers has yet to do very much for memory tester vendors. Advantest – the dominant maker of memory testers – commented in its financial report for its second fiscal quarter of 2009 (July-September) that its memory tester sales grew 56 percent sequentially in the quarter, to US$16.4 million, “mainly on increased shipments of DDR3 testers.” However that was down 86.1 percent (in yen) from US$ 110.1 million in the same quarter of 2008. Verigy, in its report for its fiscal quarter ended July 31, noted that “Memory ATE purchases continued to be slow for all competitors, and we expect investments to continue at low levels through the remainder of calendar 2009." Its memory sales remained flat at $4 million, even though they benefitted from collections for systems that were shipped last year but for which revenue was not recognized due to collectability issues. Its CEO, Keith Barnes commented. “I think that memory makers are trying to squeeze their testers as far as they can go, but the DDR3 testing that’s occurring is happening below 1 gigabit per second, and if you have to test devices at a higher speed then you need a different system." THE FINAL TEST REPORT Teradyne’s CEO, Mike Bradley, noted in his analyst call for its third quarter, ended Oct. 4, 2009, that FLASH and high-speed memory test demand remains much lower than in prior periods. We’ve seen our first new ordering for FLASH this quarter, after virtually no business in the first half of the year. So, we are now more optimistic, albeit cautiously that FLASH could start to participate more in the recovery.” He did also note that Teradyne has received multiple orders for its UltraFLEX High Speed Memory system. He added, “These systems are now installed at our customers in both engineering and production and we expect full acceptance and revenue recognition for them in this the fourth quarter. He was asked by a Morgan Stanley analyst – “Advantest reported yesterday and if I add their DDR3 test units and add a couple of units from you, we are still at a handful of DDR3 units. If I look at the rate of DDR3 migration from DDR2, clearly the premium has gone away for DDR3. That migration rate has been quite steep. As per our estimate it’s probably around 30- 40 percent DDR3 right now. Has it surprised you on how few DDR3 testers have been bought given the rate of DDR3 migration we have seen? Bradley replied, “If you’ve asked that question six or nine months ago, the answer would have been yes, because most people were assuming that tooling for DDR3 would have to take place in ‘09 at a much heavier rate than is happening. In the last three to six months, everyone has recognized that the reuse and the stretching of the DDR2 testers into the DDR3 low frequency range for lower speed grades has been heavily used by customers. So, there’s been a heavy reduction in CAPEX as a result and that has been the major factor in depressing DDR3 buys.” FormFactor CEO, Mario Ruscev, in his analyst call for its third quarter, was bit more optimistic saying, "We have already seen the crossover from DDR2 to DDR3 in our order activity. Page 2 November 2009 We expect the broad industry crossover point to be in the fourth quarter. Therefore, we believe that we are in the early stage of a recovery in memory spending with several key growth drivers for DRAM such as good transition to DDR3, transition to 5x nanometers followed by 4x nanometers process nodes and the transition from one gigabyte to two gigabyte devices." One result of chipmakers failure to invest in additional, and better, test capability was addressed by G. Dan Hutcheson, president of VLSI Research. He said at the ISMI Symposium last month that the problem is that ‘’no one wants to pay for test, but the practice has backfired in the consumer market." he said. This is causing what he calls ‘techno-stress'’ or a condition that end-user products are difficult to learn or will fail. “The electronics industry is taking short cuts, or, in some cases, curtailing their in-house memory test procedures. This in turn has caused an inordinate amount of failures for DRAMs, NAND and related devices in the consumer market. The reason for the memory failures is that OEMs, test houses and chip makers have cut back—or taken shortcuts—on the memory test process in an effort to cut costs," he said. He cited a recent study by Google, indicating, there is a huge problem for DRAM. ‘’Errors in dynamic random access memory (DRAM) are a common form of hardware failure in modern compute clusters. The study indicates that presently DRAM error rates are orders of magnitude higher than previously reported, with 25,000 to 70,000 errors per billion device hours per Mbit and more than 8 percent of DIMMs affected by errors per year.” He added, “there is also an inordinate amount of failures for NAND devices, causing problems for USB FLASH drives and other products.” If he is correct, memory device customers will demand better performance memory chips from chipmakers and eventually they will be forced to buy more, and better testers. Vol. 20 No. 11 THE FINAL TEST REPORT November 2009 IN FTR'S OPINION Yet another TAP equipment supplier bites the dust! As is described on p. 7 of this issue, one of this industry’s pioneers has effectively moved to the dust bin of history. It appears that Electroglas will no longer be a supplier of wafer probers, but will become a company dedicated to supporting its already installed base. Its demise is also interesting in that it was one of the seven companies that successfully completed their first public stock offerings (IPOs) during 1993 – by far the best year for ATErelated IPOs in history. The others were Aseco, Aetrium, Credence, Mosaid, Megatest and MCT – six of which have now disappeared from the scene – at least as ATE suppliers. The other five are: • Megatest went public at $12.00/ share and was acquired by Teradyne in 1994 for $22.00/share. • Handler maker Aseco that went public at $10.25/share was acquired by MCT for $4.00/share in January 2000. • Mosaid went public at C$6.00 and still exists as a semiconductor IP company, but sold all of its chip test IP assets to Teradyne for $17 million in February 2007. • Credence, which went public at $4.00/share (adjusted) was acquired by LTX in August 2009 at $1.20/ share. • MCT went public at $12.00/ share and filed for bankruptcy on August 18, 2009. So, as of this time, Aetrium is the lone survivor of the “Class of ‘93". It went public at $5.83/share continues to operate – although in during a very difficult period in 2004 it said it was looking at strategic alternatives. Its shares closed last month at $2.79 -but it has reported small losses for its first three quarters of 2009. The reasons for the demise of each of these companies are somewhat different, but all could arguably be the result of very poor top management at some time previous to their failure. Electroglas is a classic example of what has happened to a number of ATE-related companies. The company closed its initial public offering on July 1, 1993, at $16.00/ share and its stock climbed to over $75 in August 1995 – before splitting 2:1 in December of that year. At the time, Electroglas was the second largest prober supplier worldwide, just behind TEL., and the largest supplier in the non-Japanese market – selling more than half of the probers used in the U.S. and Europe. Electroglas’ transition from General Signal to an independent company was led by Neil Bonke, who had been president of General Signal’s Semiconductor Equipment Operations. In general he did a good job as CEO, with the exception of his final decision – to recruit Curt Wozniak from Xilinx, where he had been its president/COO – as the company’s CEO. Bonke remained as the company’s chairman for a year, until Woziniak replaced him in that position as well. One of Wozniak’s first moves was to purchase 21.5 acres of land in South San Jose, CA to build what was originally planned as a 400,000 sq. ft. campus for the company. The company moved to the new facilities in 1999. Wozniak also set-out to expand Electroglas’ product lines to include data analysis and post-fab inspection with a series of generally unsuccessful acquisition. In 2000, Electroglas reported a profit of $40.5 million on sales of $225 million – and its stock hit a high of $44.00. But, in 2001 its sales tumbled to $57.1 million – and an operating loss of $80.5 million. Its revenues have remained in that range ever since. Wozniak laid-off most of its manufacturing employees and moved manufacturing of its wafer probers to Singapore. Page 3 However by March of 2003 its stock had fallen to $0.83 and Wozniak admitted that “the company’s short term goal is survival.” In October 2003, he was forced by the company’s board to resign and was replaced as CEO/ Chairman by Keith Barnes – who had been acquired by Credence Systems along with his company IMS in May 2001. When Barnes took over the company its shares had recovered to about $3.40 as he began selling-off the product lines which Wozniak had acquired. He also sold its twentyacre, 263,000 square-foot facility to Integrated Device Technology. However, apparently realizing that Electroglas was too far gone to turn around, Barnes resigned to take the Chairman/CEO/President positions at Verigy. During Barnes last fiscal period at Electroglas – Jan. ‘05 through May ’06 (17 months, as it had changed its fiscal year during 2005) the company had a loss of $34 million on revenues of $44.3 million. On April 10, 2006 Thomas M. Rohrs, a member of the company’s board replaced Barnes as CEO/Chairman. He moved to exchange $25.0 million of its Notes for 4,268,000 shares of its common stock and $7.5 million in cash, but adding $17.6 million to its operating loss. He also canceled the Sidewinder strip test handler, resulting in a $3.4 million writeoff adding to the company’s loss for the quarter of $5.7 million. In February of this year Rohrs was replaced by its COO, Warren Kocmond, Jr. In July 2009 Electroglas filed for Chapter 7 bankruptcy. This writer has often opined about the difficulties of successfully running an ATE company – but too often a combination of incompetence and greed makes it impossible.! But, that's just my opinion. Vol. 20 No. 11 THE FINAL TEST REPORT $400 0.5 SEM I TAP Bk /BILL 0.25 U.S.TAP VENDORS' Book & Bill $350 $300 0 November 2009 $32 $28 Monthly & 3 Mos. Av. Worldwide Chip Sales (US$B) $250 -0.25 3-M o. Avg. -0.5 -0.75 Se p M ar Se p 2007 2008 $24 $200 Source: SEMI $150 M ar Se p 2009 $ M illion $100 Bill $50 $20 2 Yr. Av $16 Book $0 Sep Jan May Sep Jan May Sep 2007 2008 2009 SEMI Sept. 2009 Eqpt. B/B at 1.17 SEMI said that No. American chipequipment suppliers reported bookings of $732.8 million (3-month average) for September, up 19.3 percent from August bookings of $614.5 million and up 12.8 percent YoY. Total equipment billings were $624.6 million in September, up 7.7 percent from August billings of $580.0 million, but down 32.6 percent YoY. The resulting book-to-bill was 1.17 Total equipment bookings and billings were $649.9 million and $927.3 million, respectively, in Sept. 2008. Dan Tracy, director of industry research at SEMI, noted, "September 2009 is the first time since May 2007 that YoY bookings have risen and is in-line with the gradually improving CAPEX outlook for the remainder of this year and into next year." Front-end equipment bookings were $566.6 million in Sept., up 17.8 percent MoM and up 10.6 percent YoY. Billings were $497.0 million' up 7.0 percent MoM, but down 32.1 percent YoY. The Front-end equipment B/B for in September was 1.14. Test, Assembly and Packaging (TAP) equipment bookings were $166.2 million in September, up 24.5 percent from the $133.5 million reported in August, and up 21.0 percent YoY. Billings were $127.6 million, up 10.3 percent MoM but down 34.5 percent YoY. The resulting September 2009 TAP equipment B/B was 1.30. TAP Eqpt Book-to-Bill Aug’09 Sep’09 Book $133.5 $166.2 Sep’08 $137.4 Bill B/B $194.9 0.70 $115.7 $127.6 1.15 1.30 August 2009 WW Chip Sales The SIA reported on Oct. 2 that three-month average worldwide chip sales in August were $19.06 billion, an increase of 5.0 percent from July 2009 when sales were $18.15 billion, but down 16.1 percent from August 2008, when sales were $22.71 billion. Sales were up sequentially in all geographic regions. Year-to-date sales through August were down 21.3 percent to $133.8 billion from $170.1 billion at this time last year. It noted that, “The rate of decline has slowed from the first six months of ‘09 during which sales fell by 25 percent YoY.” MoM US$Billion YoY Jul'09 Aug'09 %Change Aug'08 %Change Americas 3.08 3.25 5.4% 3.32 -2.3% Europe 2.32 2.41 3.9% 3.45 -30.1% Japan 3.22 3.36 4.4% 4.22 -20.4% Asia-Pacific 9.54 10.04 5.3% 11.72 -14.3% 18.15 19.06 5.0% 22.71 -16.1% Page 4 3 Mos. Av. $12 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 August Actual Chip Sales Dwn 12.9% YoY August ‘actual’ chip sales were $19.01 billion, down just 12.9 percent from the $21.83 billion in sales recorded in August 2008, according to the WSTS. This was a dramatic turnaround from June when actual global chip sales were $19.27 billion, but that was 24.5 percent behind where they were in June 2008. One factor was the Americas region, where the chip market was ahead of its value in August 2008, becoming the first region to show YoY growth since September of 2008. All other regional markets were lower than they were in August 2008. Nevertheless, year-to-date chip sales in the Americas Region were still down 12.3 percent compared with the same period in 2008. Over all IC revenues were down 13.5 percent as ASPs fell 6.1 percent and units shipped fell 7.8 percent YoY. The most notable YoY gainer in August was NAND FLASH that for each month since December ‘08 has shown sequential revenue growth. In August NAND ASPs rose 11.6 percent, units shipped rose 27.9 percent and revenue rose 42.8 percent YoY. Aug ‘09 Regional Chip Sales (US$Billion) Market Total Monthly Market Sales Americas $3.22 MoM 3.2% YoY 7.6% Europe Japan $2.37 $3.27 -0.4% -27.4% -5.4% -21.2% ROA TOTAL $10.15 $19.01 2.2% -11.2% 0.6% -12.9% Vol. 20 No. 11 THE FINAL TEST REPORT ''A few of the other current top 10 companies should make the list, although some of them could be in Close Change 52 Week other forms due to mergers or other Ticker 10/30 Month High Low combinations. A few new companies AEHR $1.32 0.6% $3.10 $0.75 should make the top 10 by 2018 from ATRM $2.79 26.2% $2.99 $0.80 the ranks of today's number 11 to 50." ATE $22.11 -19.3% $28.04 $10.64 "Could be a new company not ranked today be in the top 10 by CSCD $5.40 6.3% $5.59 $1.81 2018? Not likely; even though comCOHU $11.38 -16.1% $14.51 $7.00 panies in this industry can grow ESIO $10.94 -18.3% $14.60 $4.69 quickly, it would be extremely diffiFORM $16.99 -29.0% $26.08 $11.36 cult for a company in less than ten INTT $0.59 89.7% $0.88 $0.10 years to go from start-up to the $10 billion or so in revenue required to KLIC $4.65 -22.9% $6.68 $1.11 make the top 10 in 2018,'' he said. LTXC $1.34 -18.8% $1.90 $0.09 "It is also unlikely a broadbased TER $8.37 -9.5% $10.67 $2.80 chip maker will rule in 2018. The VRGY $9.84 -15.3% $15.11 $6.14 trend over the last 30 years is not the country in which the companies are Av g. Change -2.2% based. All of the top 10 companies are multinational. The key trend is the disappearance of the broadline semiconductor company,'' he said. ''In 1978, all top 10 companies In 1978, Texas Instruments and were basically broadline semiconMotorola were the top two chip comductor suppliers. Of the 2008 top 10, panies, followed by NEC and Hitachi. only Toshiba and Infineon can be By 1988, Japanese companies occuconsidered broadline suppliers. The pied the top three spots. Ten years trend toward focused companies will later, Intel moved to No 1, Where it continue," says Jewell. ''The high remains today. (See chart below) costs of fabs, R&D, and IC design So, which companies will be in the make it difficult for any company to top 10 in 2018? sustain a broad product line. ''I think it is safe to say Intel and ''The chip market is moving toward Samsung will be there,'' said Bill two major product types: commodJewell, principal of Semiconductor ity and application specific. ComIntelligence LLC (Dallas, TX), a semimodity devices, such as DRAM and conductor research firm. FLASH, are very dependent on economies of Top 10 Semiconductor Suppliers scale. Memory companies need huge capital 1978 1988 1998 2008 investment for their 1 TI NEC Intel Intel fabs, thus they generally 2 Motorola Toshiba NEC Samsung do not have the re3 NEC Hitachi Motorola Toshiba sources to develop other product lines. 4 Hitachi Motorola Toshiba TI ASICS require design 5 Philips TI TI STMicro expertise for the end 6 Toshiba Intel Samsung Renesas application, requiring a 7 National Fujitsu Hitachi Sony significant amount of engineering resources. 8 Fairchild Mitsubishi Philips Qualcom Most of the ASIC com9 Intel Matsushita STMicro Hynix panies are small to me10 Siemens Philips Infineon Infineon dium sized and use waSource: Gartner, Dataquest, iSuppli fer foundries," he said. ATE STOCKS Who Will Be Number One in 2018? Page 5 November 2009 FINANCIAL REPORTS Aetrium Inc. Q3 Ending Sept. 30 : $000 2009 Sales 2008 $3,028 $5,509 Ops. Pft. (549) 329 Net (338) 252 Per shr. (0.03) 0.02 Cascade Microtech Inc. Q3 Ending Sept. 30 : $000 2009 Sales $13,971 Ops. Pft. Net (1,717) 2008 $21,128 (1,569) (1,419) (1,291) (0.11) (0.10) Per shr. COHU Inc. Q3 Ending Sept. 26 : $000 Sales Ops. Pft. 2009 2008 $44,062 $48,016 (798) Net (71) Per shr. 0.00 (1,275) 37 0.00 Electro Scientific Ind. Inc. FQ2 Ending Sept. 26 : $000 Sales 2009 2008 $27,638 $49,610 Ops. Pft. (9,370) (2,294) Net (6,120) (4,109) Per shr. (0.22) (0.15) FormFactor, Inc FQ3 Ending Sept. 26 : $000 2009 Sales $43,773 $ 2008 $52,584 Ops. Pft. (23,803) (28,894) (23,901) (14,041) Net Per shr. (0.48) (0.29) Teradyne, Inc FQ3 Ending Oct 4 : $000 2009 $262,162 Ops. Pft. 8,772 Net 6,675 Sales Per shr. Orders 0.04 $288,048 2008 $297,255 (17,276) (22,689) (0.13) $198,072 Vol. 20 No. 11 CQ3'09 TAP Company Financial Reports TAP equipment makers generally reported yet another quarterly loss for the third calendar quarter of 2009. (See p.4.) The major exception was Teradyne which reported a profit of $0.04/share. Cohu reported about breakeven results for the quarter. Teradyne Reported revenues for its Q3’09, ended Oct. 4, of $262 million, up $92.6 million or 55 percent sequentially. Semi test contributed $70 million of this increase for a total of $173 million and system test contributed $22 million of the growth for a total of $89 million. Semi test service revenue was $40.6 million, up from $37.6 million a quarter ago. In semi test product turns business was 50 percent versus 62 percent a quarter ago. Memory revenue, all FLASH memory, was $7.9 million in the quarter, up from $2 million a quarter ago, also all FLASH memory. Mike Bradley, Teradyne CEO commented, “In Q2 our overall semi test bookings doubled from the level of Q1. In this third quarter, we topped the Q2 total with bookings of just over $230 million or about a 70 percent growth sequentially. IDM and fabless specifiers led the way with bookings more than double the level of Q2. OSAT business totaled about $50 million, flat sequentially. From a device segment perspective, we saw very strong growth in power management applications, while our wireless business was still strong and was complemented by micro controller, storage and analog segments, which posted healthy growth in the second quarter. We are pleased with the upsurge in business from our Eagle Test product line, which recorded its strongest quarterly bookings in years. Demand for automotive and image sensor systems remains below our historical levels, so we’ve got some segments that will add to revenues as the recovery broadens. THE FINAL TEST REPORT In addition, FLASH and high-speed memory test demand remains low. We saw the first new orders for FLASH test this quarter, after virtually no business in the first half of the year. So, we are now more optimistic, albeit cautiously, that FLASH could start to participate in the recovery. In the high-speed memory area, we’ve met the important milestone of receiving multiple orders for our UltraFLEX memory tester. These systems are now installed at our customers in both engineering and production and we expect full acceptance and revenue recognition for them in this quarter." Bradley also noted that when reporting its memory revenue and orders. It will not breakout HSM and FLASH separately. Bradley added that, For the present (December) quarter our semi test revenue will again grow sequentially while our systems test revenues decline due to the lumpy nature of some of their businesses. In short, we will have system test shipping at the past Q2 level while semi test will have doubled over that same time frame. However the rapid ramp in the semi test business has put strains into our supply chain. The front part of the ramp was achieved through some inventory drawdown throughout the supply chain. With that inventory consumed, we are experiencing more part shortages which is moving our lead times out of a bit." Teradyne said that at the end of the third quarter its backlog stood at $336 million, of which, 83 percent is scheduled to ship within the next six months." Teradyne said it expects fourthquarter revenue of between $255 million and $270 million and GAAP EPS range of $0.04 to $0.09. It added that its guidance for the quarter includes the full reversal of a temporary pay cuts and a more normal product mix, but excludes the amortization of acquired intangibles, the purchase accounting inventory step-up charge, and the non-cash imputed interest on the convertible debt. Page 6 November 2009 Cohu, Inc. Reported sales were $44.1 million for the third quarter ended September 26, 2009 compared to $38.4 million for the previous quarter and $48.0 million for the same quarter in 2008. Its loss for the quarter was $71,000 or $0.00/share compared to net loss of $22.6 million or $0.97/ share in the previous quarter and net income of $37,000, or $0.00/share in the same quarter last year. (The loss for the previous quarter includes a non-cash charge of $19.6 million, or $0.84/share, for a valuation allowance against deferred tax assets.) Sales of semiconductor equipment were 72 percent of third quarter sales. Orders for chip equipment grew 41 percent sequentially, to $46.9 million On a unit basis highspeed handlers were 76 percent, thermal handlers 22 percent, and other products 2 percent. Semiconductor equipment related revenues for Q3 were approximately 83 percent international and 17 percent domestic. International sales were 90 percent Asia-Pacific, 7 percent the Americas, and 3 percent other. James Donahue, its president/CEO commented that, “Customer forecasts strengthened as the quarter progressed and this trend has continued into the fourth quarter. Orders for handling equipment were broad based across customers and products. Unit orders for pick & place handlers were at the highest levels since the first quarter of 2008 and orders for gravity handlers were the highest since the third quarter of last year. We received initial orders from a large US-based IDM for a new high parallel fast index time MATRiX that will be used by this customer for testing high performance analog ICs. And we’re excited about a major win for Rasco as a large IDM placed a multi-system order for Rasco’s strip handler, and then placed an even larger follow-on order for more systems. We also booked several additional orders for Pyramid, our nextgeneration handler that incorporates our proprietary thermal technology.” Vol. 20 No. 11 THE FINAL TEST REPORT November 2009 FormFactor, Inc. Reported that revenues for its third fiscal quarter 2009, ended on September 26, were $43.8 million, up 40.4 percent from $31.2 million in the previous quarter, but down 16.7 percent from $52.6 million for the year ago quarter. Its loss for the quarter was $23.9 million or $0.48/share, compared to a loss for the prior quarter of $65.8 million or $1.33/share and a loss for the same quarter of 2008 of $14.0 million or $0.29/share. Its non-GAAP loss for the quarter was $20.9 million or $0.42/share. Third-quarter revenue for DRAM was $36.4 million, up 44 percent sequentially and flat YoY. The FLASH business grew sequentially in the third quarter due to a pickup in NOR probe card demand to $2.1 million, up 13 percent sequentially, but still down 75 percent YoY. Revenue in the SoC business was up 34 percent sequentially to $4.6 million due to a pickup in order activity in the microprocessor segment, and an increase in activity coming from the automotive industry. However, YoY its SoC business declined 39 percent. It said it expects that its revenue for the present (December) quarter will be down approximately 10 percent sequentially. Mainly because while it shipped a number of probe cards for advanced DRAM for engineering use, it does not expect production buys until the first half of 2010 Mario Ruscev, CEO of FormFactor said, “During our third quarter, we saw improvement across all business segments. The improvement was driven by market share gain in DRAM, acceleration in DDR3, positive mobile DRAM activity and improved results in both FLASH and SoC markets. We also continued our efforts to transition the back-end of our manufacturing to Asia. As we go through our ramp up of our Asian manufacturing facilities and our new technology over the coming quarters, We expect costs related to the ramp up before we more fully see the benefits of lower manufacturing costs. FOCUS ON O n October 20 a Delaware bankruptcy court approved the sale of Electroglas’ wafer probe assets, including name and trademarks, to private financial group EG Systems – formed specifically for this purpose – for an undisclosed amount. The re-formed company will be headed by a new president/CEO Raj Kaul. He is also president/CEO of Kensington Labs. Hayward, CA based Kensington provides automation products for semiconductor and other industries. Electroglas was established in 1960, as Specialty Products, producing glass capillaries for the just-emerging semiconductor industry. After pioneering wafer prober technology during the 1960s, in 1973 Electroglas introduced the revolutionary 1034X wafer prober, which reduced operator involvement with a high-speed, friction less, automatic positioning system. It was based on a proprietary linear motor technology, the “Sawyer motor” which was originally developed in the ’70s to drive large scale plotters. The company was acquired by General Signal in 1980 as part of that company’s ultimately unsuccessful effort to establish a position in the semiconductor equipment market. In June 1993, Electroglas was “spun-off” from General Signal in arguably the most successful IPO of any of the seven ATE companies – Aseco, Aetrium, Credence, Megatest. Mosaid and MCT – which came public that year. It closed its IPO on July 1, 1993, at $16.00 and its stock climbed to over $75 in August 1995 – before splitting 2:1 in December of that year. At the time, Electroglas was the second largest prober supplier just behind TEL and the largest supplier in the non-Japanese market Page 7 It had more than half of the prober marked in the U.S. and Europe. However, in recent years the company had lost most of that market share and its revenues had stagnated to just $46.4 million, $44.3 million, $ 44.6 million and $45.4 million for its fiscal years ended June 2006 through 2009 respectively. It reported losses of $13.9 million, $34.0 million, 18.8 million and 15.9 million for those same years. On March 23 of this year the Nasdaq market suspended trading of its stock on that market. In February 2009, Electroglas and FormFactor had entered into an agreement for Electroglas to supply tools and technology to FormFactor. After Electroglas filed bankruptcy, the Delaware Bankruptcy Court approved FormFactor’s acquisition of intellectual property rights and certain technology assets of Electroglas related to precision motion control automation for an unannounced price. The purchase provides FormFactor with IP and physical assets the company will use in its manufacturing operations. EG Systems said that it plans to continue to support Electroglas’ new wafer prober systems as well as its installed base of 16,500+ systems (300-mm, 200-mm, and legacy) with spares, upgrades, service, and application support. “Refocusing on the customers will be the key to making Electroglas successful again, Kaul noted in a statement. “Foremost, we will be bringing the company’s focus back to concentrate on our worldwide customer base, which understandably was unclear during the turbulent financial times for the company and the industry in general,” he added. Vol. 20 No. 11 ,Integrated .6 LTX-C'''s Multi-system Architecture (IMA) Test/Design Pr oducts Products L TX-Credence, late last month, unveiled what it calls “a new system architecture” – its Integrated Multi-system Architecture (IMA). The new offering supports the assembly of ‘’optimized test system arrays using compact, low-cost test systems as building blocks to create high-pin count ATE systems. The IMA system allows customers to create large ‘tester arrays’ and the ability to break them apart into individual test cells as production needs change. LTX-Credence claims that ‘’Putting together an array or breaking one apart is done on the production floor in less than half a day with no support required from LTX-C. The company also notes that, "Test programs will not need to be recompiled between configurations, nor will edits need to be made when moving from single testers to IMA systems and vice versa. THE FINAL TEST REPORT The basic premise of the IMA architecture is: 1. Testers can be integrated together to obtain very high levels of resources to address the increasing number of sites customers would like to test in parallel. For example, it enables unprecedented number of sites for strip test applications. 2. The customer’s existing fleet of testers can become modules in an IMA system. The initial version of IMA will support testers of the same type and configuration and will run the same test program on each individual tester in the group (i.e. no resources are shared a cross the systems). 3. The IMA controller provides a single point of control for the communications with the test cell and interfacing to the operator. From a software point of view, the IMA system does not break the relationship between the test head and the individual tester’s controller. The IMA adds an additional controller on top of the existing individual controllers. With this architecture the IMA Array allows the distribution of multisite overhead over the individual tester controllers. While traditional test system architectures add test overhead leading to diminishing efficiencies as test sites increase, the IMA test arrays virtually eliminate this effect by utilizing parallel processing in the multi-system architecture. This results in near 100 percent multi-site efficiency as additional testers are added to an array, the company claims. The company’s first offering using IMA is with its Diamond platform. For example, an IMA array using three air-cooled Diamond test systems provides customers with up to 2,400 digital/analog pins, in a footprint requiring half the floor space compared to traditional high pin count platforms. Page 8 November 2009 The IMA software will allow up to 10 Diamonds to be integrated together. However, it notes that “while a single loadboard is practical up to the X3 limit, beyond that, interfacing to a handler requires cable docking.” However, LTX-C said that Integrated Multi-system Architecture is not dependent on a specific tester, it could be any tester in the LTX-C portfolio – and potentially with testers from other vendors – according to a company spokesman. "LTX-Credence pioneered the concept of a single, scalable test platform, and now the future of our industry is in IMA compliant tester arrays,” said Bruce MacDonald, VP of marketing at LTX-Credence. Price and availability availability: The IMA system is priced “at less than $100K and production shipments will commence in calendar Q1 of 2010, the company said. Rudolph's Die Sort Classification S/W Rudolph Technologies announced the release of its Discover Fast Review and Die Sort Classification Software for back-end manufacturing. It is specifically designed to reduce the time and cost of reviewing back-end manufacturing defects detected by its NSX Series automated macro defect inspection system. Discover automatically classifies defects, either on-line or off-line, eliminating the need to review multiple instances of similar defects. It also distinguishes nuisance defects that do not have an impact on yield from those that should receive further off-line investigation, reducing labor-intensive manual review. "We have seen improvements in review efficiency ranging from 18 to 40 percent, with commensurate reductions in time and cost of the review process," Rajiv Roy, Rudolph's VP director of back-end marketing, said. Discover is now available on new NSX Systems or as a retrofit for existing NSX installations. Vol. 20 No. 11 ,.6 Optimal Enhances its Test Management S/W OptimalTest, a supplier of enterprise-wide test management and optimization software for the semiconductor industry, will introduce new capabilities and enhancements for its Optimal Enterprise solution at the International Test Conference (ITC) in Austin TX on November 3-5. The company said its Optimal Enterprise solution "Provides additional automated expert processes and applications to establish test and test data as value-added strategic management tools." OptimalTest introduced its Test Management Solution in 2006 that addresses many test management and operational issues in a solution that is agnostic to hardware, process, product and business model. It provides semiconductor companies with a range of capabilities, based on Adaptive Test. Its latest capabilities and enhancements, allow semiconductor partners - the fabless, IDMs, foundries, and OSATs to work together to meet rapidly changing business needs. According to the company its enhanced solution now delivers highly reliable quality test data for informed decision-making across enterprise partners. Debbora Ahlgren, OptimalTest’s VP for sales & marketing, commented, “We’re providing an alternative to traditional CAPEX investment by allowing companies to do much more than simply modify existing test strategies. It now brings the benefits of highly automated statistical process control that front-end semiconductor processes have long employed to back-end test.” THE FINAL TEST REPORT Building on its existing test management solution set, Version 3.6 introduces new capabilities focused on the Optimal Enterprise :Proxy Enabler and Expert Engine. OptimalTest’s new software “proxy” acts as a stand-in for test-cell station controllers in situations where a faster, more easily deployed and lower cost capability is needed. It enables a “lite” version of test floor control, with no need to revise and re-document how test operations are run. In an accelerated “near-time” dimension, the proxy enables an early detection solution independent to STDF, allowing transfer of efficient data formats from tester to control room. It delivers test results from across distributed global operations and value-chain partners in minutes rather than days or hours. Because it detects issues in test processes, products and operations, it helps ensure access to high quality data quickly, enhancing time-to-actionable data. OT-Portal, an in-depth expert decision-support and visualization tool that offers the flexibility to create and store management reports at various levels and for various user communities. It also supports off-line analysis and simulation for adaptive test algorithms such as Test time Reduction and Outlier Detection. OT-Rules 2, is an enhancement to OT-Rules, the company’s original algorithm library and engine. It includes a new “global” rules creation enabler that allows easy proliferation of algorithms across globally distributed operations or multiple enterprises. A streamlined “smart” rules deployment engine allows flexible creation of multiple hierarchical rules in a rigid “tree” model. Hardcoded limits OT-Post rules can be executed before lot end. It also includes new rules fami- COMPANY lies for Overall Equipment Efficiency, Opera- Cadence tions, Yield recovery and Mentor Yield Learning Synopsys These enhancements Av g. Change are available now, it said. Page 9 November 2009 Teradyne/Teseda to Develop Scan Tool Teradyne announced a development agreement with Teseda to produce Scan Workbench, a next-generation portable scan debug and yield enhancement tool. It is based on industry-standard data protocols and the existing Teseda Workbench and Diagnostic Manager products. Scan Workbench will allow test engineers to better perform rapid silicon debug, design validation, failure analysis and yield monitoring resulting in decreased time-to-market and improved profitability, according to the two companies. Scan Workbench provides a consistent debug and optimization environment based on IEEE 1450.0-1999 Standard Test Interface Language (STIL) and the new STDF V4-2007 datalog standards. The software will initially be deployed on the Teradyne FLEX and J750 platforms which will provide Scan Workbench with access to an installed base of over 5,000 testers. The new toolset is expected to be shipping in the second half of 2010. "We are pleased to be working with Teradyne to help define, develop and jointly market Teseda's new Scan Workbench toolset," said Armagan Akar, Teseda president/CEO. "This new partnership allows us to work with the industry leader in ATE to offer our next-generation scan diagnostic tools to the largest potential market – the FLEX family and J750 installed base. In this ultra-competitive market, we concur with Teradyne's unique approach to support EDA- and ATE-agnostic tools in the marketplace." EDA STOCKS Ticker Close Change 10/30 Month CDNS $6.11 MENT $7.30 -17.3% SNPS $22.02 -2.6% 3.7% -5.4% 52 Week High Low $8.18 $2.55 $9.73 $3.34 $23.58 $13.94 Vol. 20 No. 11 THE FINAL TEST REPORT Advantest FQ2’09 Sales up 46.6% QoQ Focus on ASIA 1.6 SEAJ Eqpt Book/Bill 1.4 3-M onth Average 1.2 1.0 0.8 0.6 0.4 0.2 Sep Mar 2007 Sep Mar 2008 Sep 2009 SEAJ Sept. B/B at 1.28 The SEAJ reported that Japan-based chip equipment makers posted ¥61,567 million (US$672.942) in orders in September 2009 (3-month average). The bookings figure is up 11.0 percent from its final August 2009 level of ¥55,457 million, but down 22.2 percent from the Sept. 2008 bookings of ¥79,152 million. The 3-month average of billings in September 2009 was ¥48,219 million (US$527.045), up 25.0 percent from the August 2009 level of ¥38,569 million, but down 42.2 percent from the September 2008 billings level of ¥83,408 million. The SEAJ book-to-bill for September was 1.28, down from 1.44 in August. JAPANESE ATE STOCKS Close INDEX NIKKEI 225 Ticker 10/30 N225 10,035 Change Month -1.0% Adv antest 6857 2,060 -17.3% JEM 6855 639 -3.9% MJC 6871 1,472 -7.9% TEL 8035 5,240 -8.6% TSK 7729 1,158 -4.2% Yokogaw a 6841 750 -5.7% Av erage change in Oct. Yen/US$ 90.565 Advantest posted a fiscal secondquarter loss of ¥3.3 01 billion ($33.86 million) on revenues of ¥11.156 million (US$114.4 million) for the three months ended Sept. 30, down 57 percent from ¥26.062 billion in the same period last year. Advantest, along with other chip equipment makers have been faced by a 45 percent YoY drop in CAPEX by chipmakers to about US$24.3 billion. The company’s operating loss widened to ¥3.446 billion (US$35.55 million) from ¥2.089 billion a year earlier. Sales slumped 57 percent to ¥11.2 billion (US$114.4 million). Its bookings for the quarter were ¥14.4 billion (US$147. 7 million), down 20.4 percent YoY but up from ¥11.6 billion in the previous quarter, Memory tester sales fell to ¥1.6 billion (US16.4 million) from ¥11.5 billion in the same quarter last year. The company commented that “orders and sales of DDR3 DRAM test systems increased in anticipation of growing demand for PCs that utilize these high-speed memory devices.” None-memory tester sales were ¥5.5 billion (US$56.4 million) up 84 percent sequentially as a result of increased shipments of T2000 modules for MPU test, it said. Handler and interface sales were ¥2.1 billion (US$21.5 million), down 59.6 percent YoY. Orders for semiconductor and component testers sales fell 32.7 percent YoY to ¥ 7.7 billion (US$79.0 million). Orders for handlers and interfaces rose 65.9 percent YoY to ¥ 4.7 billion (US$48.2 million). -7.9% 0.9% Q2'09 Sales by Region ¥ Billion Japan 2.7 24.1% America Europe 1.4 0.4 12.5% 3.6% November 2009 Advantest’s sales in Japan were just 24.1 percent of its total sales for the quarter. Notably its largest sales geographically were in the Rest-of-Asia (ROA), at ¥3.6 billion which would indicate that its sales in China – although not specified by the company – were quite substantial and China may have been its largest regional customer – exceeding even Japan. Looking to the future, Advantest said that although the global tester market is forecast to shrink to US$1.4 billion in 2009 – even lower than initial estimates. But, it expects it will begin to recover in 2010, rising to US$2.3 billion and then more than double 2009 sales at US$3.2 million – slightly above the 2008 level. Advantest also said that it is now focusing on the non-memory tester market, which it sees as both much larger, and more stable than the memory tester market. It said it is targeting a 30 percent share of the nonmemory market – while retaining a 70 percent share of the memory tester market – but it did not specify a time frame to meet those targets. It also said it plans “near-future” additions to its lineup of device interfaces and consumables, including probe cards with new proprietary technology. It will also expand its lease and rental offerings, in addition to direct sales. Advantest said that its visibility extends no further than FQ3’09 and thus it did not provide a full-year forecast. However, it said that if orders in FQ4’09 hit ¥20 billion, it could be profitable in the next fiscal year. (Q3'09 Yen/Dollar used was 93.7) Advantest Coporation FQ2 Ending Sept. 30 : US$Million except for per share. So. Korea Taiwan 2.0 1.1 17.9% 9.8% ROA Total 3.6 11.2 32.1% 100.0% Page 10 ¥ 2009 Sales $$114.437 2008 $249.455 Ops. Pft. (35.554) (19.995) Net (33.861) (26.705) Per shr. Orders (0.19) (0.15) $147.714 $173.246 Vol. 20 No. 11 Design & Test Issues So many functions–so few pins! O ne of the inevitable results of increasing the density of transistors as chips move to ever smaller manufacturing technologies, is that the number of I/O pins on the external interface remains the same or is actually shrinking in some cases. For engineers designing test programs for new devices, there is more to test with fewer control and observation points to do it with. Some of the reasons for the reduced number of digital test pins include: • Packaging issues and the costs of additional pins. • Reduced ATE interface, either for test pins or the functional I/O pins, or both. This can be for actual tester hardware limitations or in an effort to use less expensive (and less capable) testers. • Multi-site testing, that is, testing multiple devices in parallel. • Wafer test and the goal to minimize the contact points per die. • Growing analog content in SoC chips.. • Use of more high-speed serial pins to transfer parallel data over serial streams. More and more IC design companies are dealing with one or more of these reasons for fewer test pins and need help to implement a good digital test within these limitations. In a recent ‘white paper’ Bruce Swanson a Technical Marketing Engineer in the Silicon Test division at Mentor Graphics, outlined a couple of approaches being used by design and test engineers to deal with the problem The first is reduced pin-count test (RCPT) and the second is low pincount test (LPCT). THE FINAL TEST REPORT The RPCT approach is a methodology that uses existing boundary scan logic to reduce the number of functional pins that interface to the ATE during scan test. Boundary scan refers to the IEEE 1149.1 standard that adds some hardware on the device around the boundary of the chip. Each pin pad is connected to a special boundary scan cell, and they are stitched together into a boundary scan chain. The logic is controlled by a state machine, and the external interface is called a test access port (TAP) with either four or five pins total. The 1149.1 standard was originally created to test the circuit board interconnections between ICs, but since then, additional test techniques have taken advantage of this existing test interface. If special RPCT boundary scan cells are used on the functional pins where test values are normally supplied or captured during scan test, the TAP interface and boundary scan chain can be used to control and observe those values instead of hooking up all those pins to the ATE. This approach results in a large reduction in the number of test pins needed while keeping the test quality the same. The technique works for both stuck-at and at-speed transition scan patterns. The TAP interface can also be used for controlling on-chip built-in selftest (BIST) logic. BIST logic is usually added to designs to test the internal memories and sometimes it is also used for testing digital logic blocks or modules – MBIST and LBIST respectively. The BIST controllers reside onchip and interface to the memories or logic they are designed to test. The BIST approach eliminates the storing of test patterns on ATE because the whole test is contained within the device. The TAP controller can be designed with some custom instructions and registers to control the BIST tests and capture the test results. The TAP interface can eliminate the need separate external pin access to the ATE system. Page 11 November 2009 The most common manufacturing test technique for digital logic is to use scan patterns created by an automatic test pattern generation (ATPG) tool. This technique replaces the design’s flip-flops with scan cells and stitches them into scan chains. The scan chains connect directly to scan channels on the ATE pin interface for shifting in test patterns and shifting out the captured test responses for comparison with expected results. LPCT refers to using the on-chip test compression logic to reduce the number of ATE pins needed to provide the test patterns. The on-chip compression logic talks to the ATE scan channels and to the internal scan chains, but the relationship is one-to-many instead of traditional ATPG’s one-to-one form. This does allow the tester interface pin count to be very low, even down to one scan channel per design, or one per block if it is used in a modular fashion. However, while these solutions can reduce the number of pins needed, they can increase test time if they use techniques such as serial to parallel converter to lower the pin count requirements. ATE/DFT MEETINGS ITC 2009 3-5 November, 2009 Austin Convention Center. Austin, TX http://www.itctestweek.org/ SEMICON JAPAN 2009 2-4 December 2009 Makuhari Messe, Chiba, Japan http:/www.semiconjapan.org Vol. 20 No. 11 FREDD Y’S TEST REDDY REPOR EPORTT INDUSTRY Kim Jong-kap, CEO of Hynix forecasts a short DRAM supply situation to continue for the whole of 2010. “Even if Taiwanese and Japanese players ramp up production, the possibility of oversupply is slim as worries over a double-dip in the global economy are easing,” Kim said. Semico Research is predicting 20 percent IC revenue growth next year, with equipment suppliers looking at “a couple of good years,” followed by two years of stable growth. Another downturn will follow in 2013, with revenues declining in the face of continued good unit growth that year, it said. SEMI said at Semicon Taiwan that the U.S. will spend more on new chip equipment this year than any other country, for the first time since 1994 – replacing Japan. New factory spending plans by Intel and Globalfoundries put U.S. chip equipment spending on track to reach $3.56 billion this year, it said. THE FINAL TEST REPORT November 2009 COMPANIES PEOPLE FormFactor unveiled its TouchMatrix – a 300-mm full-wafer contact probe card for NAND FLASH chips. It enables testing of FLASH devices down to sub 32-nm process nodes, including those integrating three-bit and four-bit memory cell architectures. John Pollock has been named to newly created position of president of Aetrium Aetrium. He has been with Aetrium for 14 years and most recently was General Manager of its North Saint Paul, MN facility. Aehr Test Systems said that the Nasdaq Stock Market said it has regained compliance with the $1.00 minimum closing bid price requirement. Brian Halla will step down as CEO of National Semi as of November 3, but will remain as its executive chairman through next May. Donald Macleod Macleod, currently National’s president and COO, will succeed Halla as CEO. Plastronics Socket introduced a reusable, reconfigurable, and repairable socket for burn-in. Its president David Pfaff claims, “Our new ES socket series allows customers to reuse, reconfigure, or refurbish their sockets, saving both time and money. ALLVIA, the first through-silicon via (TSV) foundry, has purchased a manufacturing facility in Hillsboro, OR for production of their TSV technology products. It currently imanufactures in Sunnyvale, CA STATS ChipPAC said its revenue for Q3'09 rose 21.5% sequentially to $389.8 million but down 17.5% YoY Its net was $25.1 million or $0.01/ share. Its CAPEX for the quarter was $40.9 million or 10.5% of revenue compared to $97.3 million or 20.6% of revenue in Q3 2008. Thomas Seifert has been named Sr. VP and CFO for AMD. He succeeds Robert Rivet Rivet, who was promoted to chief operations and administrative officer. Seifert joins AMD from Qimonda AG, where he most recently was COO/CFO. Dr. Shang-Yi Chiang has rejoined TSMC as its Sr. VP of R&D. He left TSMC temporarily three years ago to take care of his ailing father, who recently passed away.” Dr. Aart de Geus, CEO and cofounder of Synopsys, has been named this year’s recipient of the GSA's Exemplary Leadership Award. Ar ou rreading eading someone else’ y of this rree por t? Aree yyou else’ss cop copy port? Your customers, vendors, competitors, and co-workers are all reading The Final Test Report every month. Isn’t time you had your own copy for just $195.00 per year? We will send you the next two issues with no obligation. You will not be invoiced until after you receive your second issue. In addition, if you include your e:mail address, we will e:mail you the weekly updATE as well. 11_09 Subscribing is easy — just fill-out this form and fax a copy to: 925-906-9427 NAME or: COMPANY Drop your business card into an envelope and mail it to: TITLE/DEPARTMENT IKONIX Corporation P.O. Box 1938 Lafayette, CA, USA 94549-1938 FTR gives you the information you need — when you need it! STREET OR P.O. BOX CITY E:Mail MAIL STOP ST. ZIP