Cypress shifts to 'labless' model with test facility sale

By Colleen Taylor, Contributing Editor -- 7/23/2007

In the latest of a series of streamlining moves San Jose, Calif.-based semiconductor designer and manufacturer Cypress Semiconductor Corp. has made in recent months, Presto Engineering Inc. today announced that it has acquired a test facility in San Jose from Cypress.

Presto Engineering, which is also based in San Jose, provides design success analysis services to the semiconductor industry. Financial terms of the deal have not been disclosed.

Presto Engineering said that the acquisition of the 9,800-square-foot operation will enable the company to provide product engineering services to Cypress and other semiconductor manufacturers, with a focus on improving the speed and predictability of new products as they ramp up from design to manufacturing. The new facility will provide Presto Engineering with in-house test capabilities and capacity to offer electrical testing services to other semiconductor manufacturers and design houses, the company said.

"The facility enhances our ability to support customers quickly and comprehensively," Presto Engineering's CEO Michel Villemain said in a statement. "We expect the industry to move toward 'labless' product engineering in the same way it has moved to 'fabless' manufacturing."

Indeed, Cypress can be counted among the companies that have transitioned to a fabless business model in recent months. In February, Cypress handed off its next-generation process development and all manufacturing at 65-nm and below for its core SRAM products to Taiwan-based foundry United Microelectronics Corp. (UMC).  In January, Cypress sold its Silicon Valley Technology Center (SVTC) foundry to two private equity firms for approximately $53 million in cash. Cypress remains an SVTC customer.

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