Sam,
Back end is probing, testing, packaging, testing. It is characterized by lower tech, shorter lead times, machine centric rather than process centric function, and finally, it is required for chips that have been fabricated, not chips to be fabricated.
There are far fewer dollars required for technology purchases in the back end. Back end purchases don't have the quantum requirement of a complete fab line to test the process and ramp up yield.
The significance is that back end could pretty much go to zero. Front end will never go to zero, but it can get pretty low. In this case, if you are looking for a leading indicator, it is the back end. If back end continues to suffer, front end will eventually follow. If back end improves, it indicates that chip production is at a level where short term capital equipment orders are increasing and longer term orders are likely to follow. |
