The industry’s consolidation of Tier 1 semiconductor fabs has been well documented. Given the tremendous sums of capital required to build and operate a fab, that concentration is hardly surprising.
Gartner Group, for instance, has predicted that by 2014 there will be just 10 leading edge fabs in the world. In fact, Gartner says, this concentration of capital isn’t anything recent or driven by last year’s downturn; there’s been a long-term trend toward concentrated capital dating back to 1995, independent of any economic cycle.
What does this mean for test? Will it change the way test engineers design their systems, or the types of systems test companies such as Keithley Instruments will bring to market? I believe so, and here’s how:
The predicted consolidation of Tier 1 semiconductor manufacturers will likely affect demand for “big iron” test equipment. There will be fewer buyers of these systems -- not necessarily fewer deployments, as wafer demand isn’t expected to drop as a result of Tier 1 consolidation. These big iron systems will just be re-deployed within the industry to fewer buyers. As a result, the stakes for winning or losing these orders will be ratcheted higher, as a single win or loss will have a larger impact than today on a test company’s market share. Only the largest test companies will have the capital to withstand the rigors of the Tier 1 sector of the market, so there will be fewer choices available to the test manager at Tier 1s.
The Tier 2 fabs will migrate to more flexible test equipment solutions rather than the single-purpose “big iron” system. Their business model isn’t based on pushing the edge of Moore’s Law to the very latest node. They’re doing more niche products, more analog and discrete products. It’s a totally different approach.
What does this mean for test? If you’re a test manager in a Tier 1, you’re likely looking at bleeding edge solutions on process nodes and scribe widths. You’ll have a tremendous amount of buying power, but you’ll have fewer companies able to provide that leading edge measurement capability.
The Tier 2 test manager will be coordinating more applications, more solutions, and require more flexibility from his/her test hardware choices. A test system built for one part of the fab must be built in a way that can support a different portion of the fab tomorrow. The big iron system isn’t envisioned for this sector of the market, so you’ll find more instrument-based systems inside the Tier 2s to align with their business model.
End of the day: the test manager at a Tier 1 has bigger budgets and fewer choices; the test manager at the Tier 2 has more choices, more flexibility, but not as big a checkbook as his Tier 1 counterpart.
