1. service excellence for customers world-wide www.atlantic1.co.uk The Cost Of Test: A Perspective from a Test Service Provider SETNET User Group 21 February, 2002 London

2. service excellence for customers world-wide www.atlantic1.co.uk Test in House or Contract out ? Overview What is contract Test ? Main Factors to consider: In-house vs. Contract out How contract test can provide business benefit Conclusion

3. service excellence for customers world-wide www.atlantic1.co.uk What is contract test? Either : - Contracted Test Production Test programme and hardware supplied to test house Or : - Full Solution Test Development and contract test (Turnkey)

4. service excellence for customers world-wide www.atlantic1.co.uk Main Factors to consider for outsourcing test Costs Time to Market Quality + Reliability Service Support Security

5. service excellence for customers world-wide www.atlantic1.co.uk Cost (Capital) Digital Mixed-Signal High End Digital/FR SOC RF Low Cost Rack & Stack $(m) 1 2 Capability Functionality Channels Speed RF $(k) 250 500 Capability Performance Versatility Features Bench Top Dedicated Flexible with vision Flexible dual/quad site Test Systems Handler Systems

6. service excellence for customers world-wide www.atlantic1.co.uk Cost (Others) Space ($$$ per square foot) Power Requirements Maintenance (Hardware & Software) Personnel training & skills Shift working Lead scan and pack requirements Logistics

7. service excellence for customers world-wide www.atlantic1.co.uk Cost (Unit test cost) 1000 100 10 1 High end Systems Mid range Systems 101001000 Volume per month (ku ) Units cost (cents) Typical unit test cost per second Technology Driving more advanced test needs

8. service excellence for customers world-wide www.atlantic1.co.uk Time to market Lead-time for selecting and buying capital equipment (Typically 40 weeks total) Possible need for multiple test platform and handler systems Test software & Hardware development times Product qualification timescale

9. service excellence for customers world-wide www.atlantic1.co.uk Quality Demands for <10ppm Visual/Mechanical & Electrical Quality Customers want long tern reliability despite shortening life cycles Need to consider –Product Qualification –Product handling (to avoid mechanical problems) –Test Production procedures (to avoid mixing) –Test program quality (to ensure adequate test coverage )

10. service excellence for customers world-wide www.atlantic1.co.uk Service Customers want both flexibility & fast response –Ability to test & Ship with short cycle time –Direct shipment to end customers –Reduced logistics time & test

11. service excellence for customers world-wide www.atlantic1.co.uk Support The ability to support the development & production activities: –Test development –Product & Production support staff –Maintenance staff & full spares capability –Production –24 x 7

12. service excellence for customers world-wide www.atlantic1.co.uk Security IP is becoming more critical for competitive advantage Obvious desire to keep all operations in house: –Diffusion –Assembly –Test –Shipping / Logistics Need to develop confidence and trust in suppliers/partners

13. service excellence for customers world-wide www.atlantic1.co.uk How Contract Test Can Provide Business Benefit

14. service excellence for customers world-wide www.atlantic1.co.uk Cost (Capital) No/Low capital Investment Contract test house has full range of test systems and handlers Low entry cost

15. service excellence for customers world-wide www.atlantic1.co.uk Cost (Others) Contract test provides and caters for all: Space Power Maintenance (Hardware and Software) Personnel Training & Skills Shift working Lead Scan and Pack Requirements Logistics

16. service excellence for customers world-wide www.atlantic1.co.uk Cost Comparison (Unit test cost) 1000 100 10 1 High end Systems Mid range Systems 101001000 Volume per month (ku ) Units cost (cents) Typical unit test cost per second High end Systems contract Test Mid range Systems – contract Test

17. service excellence for customers world-wide www.atlantic1.co.uk Time to Market No lead-time for capital equipment – already in place Multiple system types to cater for all market needs –Digital high i/o –Mixed Signal –RF –RF & Digital & Mixed Signal (SOC) Software and hardware development in parallel with chip design Test contractor with full skills and experience in house.

18. service excellence for customers world-wide www.atlantic1.co.uk Quality Test contractor has full mature quality system and infrastructure to assure <20ppm visual/mechanical and electrical quality levels Reliable Facilities for full product qualification ISO9000 & QS9000 Certification

19. service excellence for customers world-wide www.atlantic1.co.uk Service Contractor can support flexible and fast response by: –24 hours continuous operations –Large range of installed test and handler systems –On site Assembly facility (<4 Day c/t) feeding contract test –Direct shipments to end customers (Web-Enabled) –Overall reduction in logistics

20. service excellence for customers world-wide www.atlantic1.co.uk Support Contractor has full services to support development and production activities: Test development (simple digital, RF, SOC) Production Support Maintenance (Equipment, software, hardware and product) Production Personnel 24 hour operations Test development (simple digital & SOC)

21. service excellence for customers world-wide www.atlantic1.co.uk Security Contractor has systems in place to ensure security: Procedures (Audited) Aviation Security NDA Secure system for data transfer On-Site security 24x7 with cctv One Entrance/Exit to facility Locality / Time zone

22. service excellence for customers world-wide www.atlantic1.co.uk Conclusions Contract test offers big benefits for medium to high volume applications: No/Low capital investment Low consistent unit cost Cost insulation from market fluctuations Full turnkey solution Full infrastructure support World Class Service (Plus comprehensive assembly facility) Secure environment