If you are reading this column, you have survived one of the toughest years in the semiconductor business. After accelerating from 1999 through 2000, at a pace that would shame the space shuttle, our marketplace rediscovered gravity and has been stalled at idle for all of last year. This inertia has left many device test organizations with excess capacity and a notion that they will be able to react appropriately when business picks up. The CWPs ("Certified Wise People") who do the forecasting tell me that there will be some sort of recovery this year-although there is a lot of argument as to the ramp rate. Whatever the rate, however, there are several issues that we need to prepare for. One key item is the suitability of installed equipment to test those devices that will be the engines that power the recovery. Figuring Out Reaction Time If the equipment in your company is not suitable to test these devices, it doesn't matter how much excess capacity you have. In addition, you must figure out the reaction time that your organization will need to retool both equipment and people to test different technologies. For example, largely digital devices powered the booms of the 80's and early 90's. Mixed signal and SOC (System-on-a-Chip) devices drove the mid to late 90's. Flash, wireless and embedded memory really took off in the 2000 timeframe, along with all sorts of wired communication devices. Memory has been big through each of the booms, but with a different interface or technology at each juncture. EDO, SDRAM, DDR, and RAMBUS are a few that come to mind.
Now, however, is the time to evaluate your (or your vendor's) installed base of testers, handlers, software, people and facilities. See if they match up to what you (and others) believe will be needed in the coming year. Another task, albeit a less obvious one, is to rethink your strategy for test capacity sources. Negotiate vendor contracts now, if at all possible. Now is when most assembly and test subcontractors are hungry for business, and are inclined to offer mutually advantageous deals. Furthermore, the economic doldrums are a good time to work out new strategies and contracts for supplies of load boards, interfaces, contactors and sockets. These "consumables" add up to millions of dollars in good times. For instance, can your company partially fund a run of interfaces at your vendor (at a great price) and leave them inventoried there until needed? If so, you may get the best of both price and delivery this year, while leaving cash in your bank. At the same time, you will help your vendor keep more of its workers in place, until they really needed to meet full capacity. You can apply this idea to other areas, too. Speaking of strategies, does your test area offer enough physical space for its five-year capacity plan? If not, now is the time to buy it or cut the leases. If your company has the resources, facilities costs in most regions are at a three-year low. Silicon Valley has gone from almost zero space available a year ago to about 25% availability at prices that start to make sense again. (A five-year lease will get you through the whole next cycle!) Educate Yourself and Your Staff Finally, get some education for yourself and your staff. This can take many forms. Read (like you are doing now), go to vendor-sponsored seminars, trade shows and skills courses. I'm waiting for the fair winds of more business along with you. Please honk when you feel them and be ready to act!
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