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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (37282)	9/15/2000 3:42:22 PM
From: Proud_Infidel	Respond to of 70976

Surge in tester orders, part shortages stretch delivery times in Taiwan By Mark LaPedus Semiconductor Business News (09/15/00, 01:47:01 PM EDT) TAIPEI, Taiwan -- At the Semicon Taiwan trade show here, suppliers of automatic test equipment claim they are now scrambling to expand production to keep up with a surge in demand for chip testers--especially from an emerging crop of test subcontractors on the island. But ATE vendors interviewed at the annual Taipei show this week say they are unable to ship enough systems to Taiwan's test subcontractors, and some equipment suppliers estimate that testing houses face lead times of about six months for new test gear. Caught by surprise with an unexpected surge in orders from local test houses, ATE vendors say they also face another major problem: the inability to obtain certain components for building testers. The supply-chain issue is compounding the ability to keep up with ATE shipment schedules, according to managers at the trade show. This is all bad news for Taiwan's burgeoning test-subcontracting industry, which has become more of a vital part of the region's semiconductor food chain. Subcontracting of chip testing is skyrocketing for a variety of reasons, including the rising cost of advanced ATE systems, time-to-market pressures on chip makers, and changes in IC packaging technologies that require new investments in test-handling equipment (see feature story). In the midst of the equipment shortage, many test subcontractors recently reported that they have been forced to turn away business (see feature story). In total, Taiwan's test equipment market is expected to grow from about $600-to-700 million in 1999 to $1 billion in 2000, according to analysts. At Semicon Taiwan this week, ATE vendors painted a grim picture in terms of the supply/demand situation. "The demand for ATE is very strong on the logic and memory side in Taiwan," said S.I. Wei, field operations manager for Teradyne Inc.'s Taiwan subsidiary, Teradyne Taiwan Ltd. in Hsinchu. "But typically, the lead time for a [tester] is about three to six months," said Wei in an interview with SBN. Teradyne and other major ATE suppliers face similar problems. After a major downturn in the equipment market in 1998, suppliers were suddenly hit with a surge of orders as the Asian chip industry recovered in 1999. "In early 1999, people were not ordering many testers," Wei said. "Then in the second half of 1999, business began to pick up. Now, business is booming." ATE vendors have been unable to obtain certain ASICs and other components used in their test systems, which is pushing out lead times for equipment, he said. "Tester parts are unique," Wei noted. "An inability to get these parts will impact shipments." To help meet demand, Teradyne itself is expanding its own production capacity, he added, without elaborating. Other ATE houses are also expanding their capacities, including Japan's Advantest Corp. Like Teradyne, however, Advantest is also struggling to meet demand in Taiwan. "Normally, our lead times are about four months," said Tommy Chen, techical sales manager for the company's Taiwan subsidiary, Advantest Taiwan Inc., based in Hsinchu. "But if a customer places a multiple-system order for about five systems, we can shorten the lead time," Chen said. Agilent, Credence, LTX, and others did not have a presence at the Semicon Taiwan show and could not be reached for comment about market conditions in the region.