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IC design companies press for lower testing, packaging quotes

Posted: 02 May 2006 ?? ?Print Version ?Bookmark and Share

Keywords:foundry? IC design? testing? packaging?

Despite strong demand for foundry services by IC design companies, they are withholding orders for testing and packaging services in a bid to pull down prices, according to industry sources.

Industry observers note that a large gap currently exists between the IC design companies' outlook and those of testing and packaging companies. Testing and packaging companies remain conservative of their projections in the next few months while IC designers forecast higher sales and profits.

For instance, foundries Himax Technologies Inc. and Novatek Microelectronics Corp. Ltd expect higher demand and shipments for 0.18?m, 0.25?m and 0.35?m processes this quarter.

On the other hand, packaging and testing service suppliers Chipbond Technology Corp. and International Semiconductor Technology Ltd (IST) revised their forecasts for the quarter. Chipbond reduced its revenue projection from 35 percent to 15 percent, while IST expects a 5 percent revenue growth this quarter.

With the gap in revenue forecasts, market observers believe that IC designers will try to pressure testing and packaging houses to lower their quotes before the peak season in the second half of the year.

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