Credence: Quick-change artist

Credence helps new ICs move from design to test more rapidly, which translates into faster time-to-market for customers—and a stronger position for Credence.

By Terrence Lynch -- Movers and Shakers, 8/15/2003

WITH THE COMPLEXITY OF today's deep submicron electronics, it now costs more to design modern ICs than it does to manufacture them. For Credence Systems, a venerable maker of production-line ATE (automatic test equipment), that new reality in manufacturing economics looked like an opportunity.

As David Ranhoff, Credence's president and COO, explains it, "With our customers spending more of their money closer to design, we felt it was prudent to move our company closer to design, so we can give them a faster time-to-market proposition."

David Ranhoff, President and COO, Credence Systems

"In the semiconductor industry, we want to be known as the 'design-to-test' company," he continues, "the company that can help customers get out of design into test rapidly, the company that can service them well with a compelling economic proposition in volume production."

To make that happen, the company added to its portfolio of expertise by acquiring several different companies over the last three years, including hardware and software companies involved in design validation and test. With the acquisitions of Integrated Measurement Systems (IMS) in August 2001 and Optonics in January 2003, Credence gathered together the nucleus of its new vision.

Optonics makes emission-based optical-diagnostic and failure-analysis tools—essentially computer-aided microscopes with quarter-micron resolution that can capture images of integrated-circuit nodes as they switch on or off. IMS specializes in equipment and software for creating design-validation test routines. Their first collaboration under the Credence umbrella is called Verity.

"The purpose of Verity is to allow customers to get to second silicon more rapidly," Ranhoff says. Semiconductor designers use simulation tools to create new IC concepts, but with complex designs, it's found that about 80 percent of these devices do not work the first time they're fabricated in silicon.

"And with 300-mm, 90-nm [fabrication] technology, the mask sets are well over $1 million [each]," Ranhoff says. "There's a lot of pressure to get the second silicon right."

Traditionally, verification tests for new IC designs were developed after the prototype design was completed—serially, in industry jargon. If test designers encountered unexpected behavior or less-than-anticipated performance, finding the cause of the trouble was a time- and money-consuming business.

The Verity product allows verification tests to be developed in parallel with the IC design, and accelerates the testing and verification process once the prototype IC is fabricated. According to Ranhoff, Verity can reduce the time to "second silicon" from months down to days. It's a new approach to the design-verification problem with obvious benefits to Credence's customers. "The Verity solution is solely aimed at decreasing time-to-market," he says.

Verity also represents a pointed move toward dealing with what Ranhoff calls the deepest, longest industry downturn the company has seen since its inception in 1978.

"When production buys are off, typically engineering buys are up," he says. "So if we have a combination of engineering and production business, the company feels that we will be better suited to deal with these cycles, rather than as a pure-play production company."

Not that Credence has forgotten its roots in production-line ATE. Its January 2003 acquisition of IC test-equipment maker SZ Testsysteme AG and SZ Testsysteme GmbH showed that the company was working to expand its business, even in bad times.

"If you looked previously at Credence, we had solutions in what we call 'everything but DRAM,'" Ranhoff says. "We did digital mixed-signal, SOC, discrete analog—but we didn't have a strong offering in the automotive and power sector. SZ plugged that hole." Moreover, he explains, those markets are generally less volatile than the consumer, PC, and cell-phone markets Credence traditionally served. SZ, he notes, has been profitable since the day the company bought it.

Credence has also expanded into the Asian market. The SZ acquisition brought new customers in Toyota and Toshiba in Japan. And after just four years there, the company has captured a 14 percent share of the testing market in China. "We hope that China will become a bigger and bigger percentage of our overall business," Ranhoff says.

Another notable change in Credence's approach to the ATE market is the changing composition of its work force. "We really believe that in the down cycle, you invest in products and customers and trim everything else back to an absolute minimum, Ranhoff says. Development engineers now make up one-third of the company. Including IT and application engineers, he estimates, over half of the company is made up of engineers or engineer-degreed personnel. With them, the company has introduced more products over the last three years than it ever introduced before.

And the mix of engineers has also changed with new technologies and new markets. "Ten years ago, there were probably two hardware engineers for every software engineer, and today it may be almost reversed," he says. "Because of the programmability of the devices and the nature of the problems we're trying to solve, it's become much more software-intensive than ever before."

The last point Ranhoff makes is that the company has been chosen first in VLSI Research's customer survey for test-equipment suppliers.

"That's a reflection of our commitment and our drive to make sure that we care for our customers during a down cycle—all while getting new products ready so that when things do improve, Credence is very well positioned to take advantage of that."