Automated Test Equipment (ATE) Market Trends
The ATE/semiconductor test space is an extremely cyclical sub-segment which experiences dramatic upturns and sudden and extreme downturns. As an example, during the 12-month period from the second half of 2003 to the first half of 2004, certain ATE vendors grew revenues over 100 percent. In the second half of 2004, these same vendors shipped few to no systems.
For much of 2005, the ATE market has shown a slow to steady recovery and the booking rates have steadly grown pointing to a sustainable mid-term outlook.
The ATE/semiconductor test segment is comprised of six distinct types of testers:.
- Analog/Linear Test
- Mixed Signal Test
- RF/Microwave Test
- Digital/Logic Test
- Memory Test
- System-on-Chip (SOC) Test
The ATE market is driven by semiconductor chip volumes. As chip volumes steadly increase, the demand for chip testers also grows. See Figure 1.
Figure 1. Total Memory Versus All Other Semiconductors
Note to Figure 1:
- 2005 values are forecasted.
Given the sharp increase in usage of memory devices in end products such as home appliances, cell phones, and automobilies, it’s no surprise that the memory tester sub-segment is the largest in the ATE space (see Table 1).
| Table 1. ATE/Semiconductor Market Size |
|
Segment
|
Annual Revenues 2004 ($Million)
|
CAGR (1)
|
|
Memory Test
|
$1,000 |
3% |
|
Mixed Signal Test
|
$800 |
9% |
|
Digital/Logic Test
|
$500 |
4% |
|
Other (SOC, RF, Analog)
|
$900 |
13% |
Note to Table 1:
- CAGR = compound annual growth rate.
Market Trends & Dynamics
The following determines market trends and dynamics in the ATE space:
- ATE vendors are tied to a boom and bust cycle
- Test equipment orders:
- Capital utilization rates drive capital equipment orders
- Customers buy on technology, low-failure rates (i.e., equipment reliability), and ability to delivery systems on time
- Device manufacturers’ sentiment on the future of chip volumes
- Reducing test times is key; lower test times equates to more devices tested which leads to higher revenues
- Each customer has their own testing methodology—leads to a high mix/low volume business (except memory market which is high volume)
- Customers want:
- To extend return on investment (ROI) of existing systems—need for in-field upgrades
- To test different technologies from day-to-day—need for flexibility in the system
- ATE vendors have a limited customer base (only 25 major independent device manufacturers and 10 independent test houses worldwide)
- ATE vendors attempt to tie development of system(s) to one “teaching” customer and ultimately leverage sales to many “production” customers
|
Literature
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