Zacks_Analysts' Blog : Complexity a Good Thing for inTEST - Analyst Blog

inTEST Corporation (INTT) is a designer, manufacturer and marketer of mechanical, thermal and electrical products that are used by semiconductor manufacturers in conjunction with automatic test equipment (ATE) in the testing of integrated circuits (ICs).



Beyond its blue chip portfolio of semiconductor manufacturers, the acquisition of Sigma has propelled the firm to diversify into non-semi thermal testing products. This has the effect of diversifying revenues and opens the company up to new markets.



In the test equipment world change is good -- be it the broad switch to mobile computing, the march to finer geometries, or the growth of electronic content in automobiles, more chip content means more testing for inTEST.



As complexity increases, so does the need for testing. Historically, increases in unit production resulted primarily from the growth of the personal computer and growth of the telecommunications industry.



It is our opinion that future unit production growth will be augmented by consumer electronics, the mobile internet, broadband network access, the increased use of digital signal processing (DSP) devices and automotive and power management applications. These increases in unit production, in turn lead to a corresponding increase in the need for test equipment.



Designers and manufacturers of a variety of electronic and industrial products, such as cell phones, telecom and datacom systems, Internet access devices, computers, transportation and consumer electronics, require increasingly complex ICs to provide improved end-product performance demanded by their customers.



Semiconductor manufacturers generally compete based on product performance and price. Testing costs represent a significant portion of the total cost of manufacturing ICs. Semiconductor manufacturers remain under pressure to maximize production yields and reduce testing costs.



At the same time, the growing complexity of ICs has increased the difficulty of maximizing test yields. In order to address these market trends, semiconductor manufacturers strive for more effective utilization of ATE, smaller test areas and increased wafer level testing. Two major areas of semiconductor content growth over the last 10 years are mobile computing and automotive.
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