Test Economics Driving Test Technology

Test Economics Driving Test Technology

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Probe Cards

Description: This was Semiconductor Wafer Test Workshop (SWTW) keynote presentation. I covers VLSI's forecast, probe card market and observations about test economics and technology.

 
Author: Risto Puhakka (Fellow) | Visits: 2142 | Page Views: 2142
Domain:  High Tech Category: Semiconductors Subcategory: Test 
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Contents:
SWTW -- June 2009

Test Economics Driving Test Technology

A storm blowing into Lake McDonald. Waterton-Glacier International Peace Park World Heritage Site, Montana

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Market Observations

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Half of The Chip Recession Was Caused by Overspending in Taiwan Memory
Capital Expenditure Ratio by Market Type
140% 120% 100% 80% 60% 40% 20% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Nan, Inot, PrM, PChp Mic, Span, Elp, Tosh, Hy, Sam AMD, IBM, Intel Chart, TSMC, UMC NSC, TI, & Mats

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Deep-Freeze Has Subsided
VLSI's GLOBAL CHIP MAKING CLIMATE TREND INDEX
(Average of Regional Order Activity Patterns in Chip Equipment) 120 110 100 90 80 70 60 50 40 30 20 10 0 -10 -20
08/07: Financial markets tumbl e. 09/08: Fi nancial markets crashed forcing govt. interventi on. 10/08: Cisco warns. Grow th Decline Line Negative Concerns: - Global economy in recession, could be entering a depression. - Conf idence Lost, Caution prevails - Unemployment soaring - Consumer debt payoffs - Excess capacity in memory & foundry - No access to funds Positive Drivers: + G20 govts w orking in concert + U.S. money supply rising + Gas prices declining + Declining IC inventories + 32/28nm Ramp +Consumer confidence rising +Memory capacity is burning +Test&Assy capacity tightening +CPPI is hot 01/09 Samsung reports i ts first quarterl y l oss. Qimonda bankrupt.

Temperature in Degrees F

Order acti vi ty inched higher, hitting 58 degrees on the back of improving industry fundamentals. Equi pment suppliers are becoming more opti mistic about thei r outl ook. Chip prices and uti lization rates are i ncreasing. Demand is al so picki ng up, prompti ng several memory suppliers to i ncrease producti on. They believe that demand is now strong enough to soak up the increases in suppl y. Thi s wil l eventual ly transl ate i nto capaci ty buys. Check below for the Customer Weather.

May-05

May-06

May-08

Mar-06

Mar-08

Nov-06

Nov-08

Mar-09

Apr-05

Apr-07

Aug-06

Aug-08

Jan-05

Jan-06

Jun-06

Jan-07

Jun-07

Jun-08

Feb-05

Feb-07

Sep-05

Sep-07

Feb-08

Oct-05

Oct-06

Oct-07

Dec-05

Week
RESTRICTED DATA: for access and use only w ithin your company. Copyright � 2009 by VLSI Research Inc. All rights reserved.

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Dec-07

Oct-08

Jan-09

Apr-09

Jul-05

Jul-07

Six Month Improvement in Spot Prices
VLSI's Spot Market Chip Price Performance Index
330 320 310 300 290 280 270 260 250 240 230 220 210 200 190 180 170 160 150 140 130 120 110 100 90 80 70 60 50
1/2/2006 2/6/2006 3/13/2006 4/17/2006

Spot Prices:Stable ML Gap: From +23.3 to +24.3 VLSI's CPPI finished the last w eek of May on a positive note, increasing 0.3 points. Memory spot prices remained soft, but MPUs picked up the slack and finished the w eek higher. The overall level of activity in the spot market w as light as traders continued to retreat. Many fear that the impending increases in memory production could w eaken prices again. How ever, memory suppliers appear conf ident that demand is strong enough to absorb the increases in supply. It's a gamble that w ill likely help the leading suppliers, w hich have the funds to shrink and low er the manufacturing costs. How ever, the ones that are behind the technology curve could end up losing more money.

VLSI's CPPI 24 Month Moore's Law Cycle 12 Month Moore's Law Cycle
5/22/2006 6/26/2006 7/31/2006 9/4/2006 10/9/2006 11/13/2006 12/18/2006 1/22/2007 2/26/2007 4/2/2007 5/7/2007 6/11/2007 7/16/2007 8/20/2007 9/24/2007 10/29/2007 12/3/2007 1/7/2008 2/11/2008 3/17/2008 4/21/2008 5/26/2008 6/30/2008 8/4/2008 9/8/2008 10/13/2008 11/17/2008 12/22/2008 1/26/2009 3/2/2009 4/6/2009 5/11/2009

Week Ending
RESTRICTED DATA: for access and use only within your company. Copyright � 2009 by VLSI Res earch Inc. All rights reserved.

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Inventories Are at Normal Levels
IC Inventories
30
Total Inventory ($B) Die Bank ($B) OEM IC Inve ntory ($B) Total Inventory to Billings Ratio

2.5

25

Billions of Dollars

20 1.5 15 1 10

5

0.5

0
JAN '04 JAN '05 JAN '06 JAN '07 JAN '08 JAN '09 MAR MAY F MAY MAR MAY MAY MAY MAY MAR MAR MAR NOV NOV NOV SEP SEP MAR NOV NOV SEP SEP JUL JUL SEP JUL JUL JUL

0

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Inventory to Billings Ratio

2

Utilization Rates Recovering
CAPACITY UTILIZATION RATES
(chip production/m anufacturing capacity, in %)
100 95

90

85

80

75

70

65

60

W.W. Front End Utilization W.W. Test Utilization

55

W.W.Assembly Utilization

50
JUL F 2008 JAN 2009 JAN MAY F 2006 JAN 2005 JAN 2007 JAN SEPT F NOV F NOV NOV SEPT SEPT SEPT NOV SEPT JUL JUL JUL MAR MAR MAR MAR JUL NOV MAR MAY MAY MAY MAY

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Semiconductor Business is Improving

-11%

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Drivers for Next Upturn
� Mobile Internet Device (MID) � Windows 7 � SSDs

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Questions



Does this economic downturn affect Moore's law?
Not really




When do you think the industry will be moving to 450mm diameter wafer?
2020




Do you predict more consolidation in big companies especially in Memory market?
Absolutely



Can you comment on the current trend of smart phones taking on more personal computer characteristics and what that means for the various semiconductor market segments?
� Processors alone can be $20 � $30B
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Market Summary
� Semiconductor industry was healthy entering into this recession. � Semiconductor business is returning to normal but lower operating levels. � Spot prices improving.
� Production cuts help tremendeously

� Capex still remains very low.

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Probe Card Market

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Top Probe Card Suppliers

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Probe Card Forecast
Probe Card History & Forecast
1,800 Total Probe Card & Related Revenue: 1,600 1,400 1,200 1,000
$M

Spares & Service Revenue:

800 600 400 200 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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Probe Card Revenue Distribution

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And The Data

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Questions
� With so many private companies supplying 'front-end' hardware (probes, boards, sockets, etc.) for test & burn-in, what is the reliability of collected market information; how are 'blind spots' mitigated?
� We drive to about 80% survey response coverage (revenues), probe card report was close to 90%



And more and more we see semiconductor manufacturers transferring test coverage complexity into the tester interface (probe card) thereby increasing the cost of the cards and making the conscience decision to not upgrade testers. - The long-term implications of this trend are thought provoking.
� I can not tell but see the data in next few slides
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Challenges in Test

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Buy Rates Show That No Glut in ATE
ATE Buy Rates
(ATE sales as a % of device sales)
6.0%

5.0%

Memory Non-Memory

4.0%

3.0%

2.0%

1.0%

0.0%
2009F 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

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ATE is Less Than Half of Total Test Hardware Spending
TEST HARDWARE SPENDING
10000 Interface Boards 9000 8000 7000 6000 Sockets Probe Cards Handlers

$M

5000 4000 3000 2000 1000 Memory ATE 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Probers Other ATE SOC ATE

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Rapid Decline in ATE Buy Rate
Test Hardware Buy Rates
3.5%
Probe Card & Sockets

3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2003 2004 2005 2006

Handlers & Probers ATE

2007

2008

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Drivers for Declining ATE & Material Handling Buy Rates
� End of Functional Testing Era.
� Testers cost less.

� Large Scale Implementation of DFT. � Modular Tester
� Upgrade cards only, higher utilization

� Parallel Testing � OSATs increasing share of testing.
� Higher utilization, efficiencies due to business model.

� Testing less
� Probe card & socket data does not agree.
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Problem of The Last Decade � IC ASPs
IC Average Selling Prices
2.20 2.00

'98 - '08 CAGR = -3.2%

1.80

1.60

$

1.40

1.20

1.00
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

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Test Has Responded to the Challenge
ATE Capital Cost per IC Unit Shipped
(ATE, Handler and Prober Depreciation Cost per IC) 0.120

7.0%

0.100

6.0%

5.0%
0.080

4.0%
0.060

3.0%
0.040

2.0% ATE Capital cost per IC unit
0.020

ATE Capital cost as % of IC ASP

1.0%

0.000
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

0.0%

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Questions
� � Relative test costs per unit are increasing, what are the best ways to reduce them?
� Data shows that hardware cost portion has declined

Regarding trend of outsourcing test to subcons, which difficulties do you expect for the "old fashioned" manufacturers?
� Product differentiation is the key



How will things shake out w/r/t the juggling/changes in the top suppliers?
� ATE & probers are ok w/ 3 suppliers. Others will see number of suppliers to decline.
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Summary
� Deep freeze in semiconductor manufacturing is easing. � Expect probe card and socket business recovers sooner than ATE.
� Back-end consumables/materials are already bouncing back.

� Test hardware is $6 - $7B business.
� Understanding the dynamics of the industry helps both the suppliers and chip makers.

� Test has responded to declining ASPs and continues to do so
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Thank You

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