Best Kept Secret:TCS to double '00 rev to $1B
Teradyne Makes Space, Buys Companies
Paul Kallender
Aug 22, 2000 --- Think of Them as Teradyne’s Best-Kept Secret.
electronicnews.com
Twenty years ago, Teradyne's Connection Systems Division (TCS) plied its trade as a $50 million-per-year military contractor supplying GE, Westinghouse and Honeywell with PCBs. Then, in the 1980s TCS got wind of something new: the PC. As demand for consumer electronics grew, so did the Boston-based board maker, carving out about 20 percent of Teradyne’s sales.
Fast forward to 2000 and TCS this year could well double last year's sales of backboard and connections business sales to $1 billion, Wayne Morrison, the company’s assembly business manager, told Electronic News today.
To meet what Morrison called “the insatiable demand for bandwidth,” TCS today said it is adding about 50 percent extra capacity through purchases and new plant.
The expansion comes on two fronts. First, earlier this week TCS confirmed it purchased two California-based companies. One, Herco Technology Corp. of San Diego, is a family-owned manufacturer of PCBs, which will add about 500 staff and 200,000 square feet of capacity for midtech high-volume board fabrication, said Morrison.
A related purchase -- that of La Verne-Calif. based Synthane Taylor -- makes the laminate for Herco’s boards. Together, said the company, the acquisitions give TCS nearly 300,000 square feet of multilayer PCB fabrication capacity to support its backplane assembly business.
Teradyne declines to reveal the purchase price; the company is believed to have paid anything up to $100 million in a stock deal.
While both companies are strategically situated near Teradyne’s West Coast customers, TCS has also added 144,000 square feet of manufacturing plant in Hudson, N.H., and a new 46,000-square-foot manufacturing facility in Fremont, Calif.
With the addition of these new dedicated manufacturing facilities, TCS said it will have nearly one million square feet of production space throughout the United States and Europe.
Terradyne is due to grow from a $1.8 billion business last year to a $3 billion concern by the end of the year, but TCS’s growth rate could top 100 percent as it struggles to meet the demand for routers and connect technology for customers such as Alcatel, Cisco, Motorola, Lucent and Ericcson.
So while Teradyne roars forward in its better-known role as a test equipment maker, TCS is not unhappy to allow its West Coast brother to take the limelight, Morrison said. More than 70 percent of Teradyne’s growth is being driven by the Internet buildout, according to the company. Morrison has a different explanation: “We are the darlings of Wall Street." |
