Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT Audit :: VAT RATES :: ACCOUNTING STANDARD :: form 3cd :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: empanelment :: due date for vat payment :: cpt :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: TDS :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT
Mergers and Acquisitions »
 Why is Avendus Capital behind most large e-commerce deals in India?
 India one of most attractive merger and acquisitions destinations in Asia.
 Deals of the day-Mergers and acquisitions june 20, 2017
 How new funding avenues, M&As are powering India’s renewable energy sector
 Finance Ministry asks PSBs to explore acquisition of smaller banks
 Bank of Baroda, Canara Bank may lead next round of mergers
  Deals of the day-Mergers and acquisitions June 13, 2017
 India’s booming stock market has a downside: It’s making M&As expensive, says BNP Paribas
 Cross border mergers make India favoured FDI route: UNCTAD
 BNP expects challenging 2017 for India M&A deals as stocks rally
 Why Gulf mergers and acquisitions are back on the rise

Mergers and Acquisitions Forge New Test Challenges
July, 07th 2015

With the recent announcement of Avago's agreement to acquire Broadcom, and other M&A activity in the semiconductor market, my first thought is focused on the increased test capacity management challenges these new organizations most assuredly will face. I could be biased in emphasizing this point, because I'm always thinking about test capacity management at, Chip Nexus, but I'm also certain that the expected acquisition synergies related to manufacturing and operations may prove more difficult to obtain when it comes to test.

One reason for this reality is the nature of test capacity. While two previously separate entities may share a common foundry and the same EDA software, the test platforms and configurations (e.g., options and licensing) used are all but guaranteed to be different. That's because test capacity is specified by the chip designer (e.g., the "test specifier") and not the test provider.

Internal test providers might have more influence over such platforms and configurations than that of external test providers—such as OSAT (Outsourced Semiconductor Assembly and Test) companies—but both largely install test capacity that is specified to them. Even when two entities use the same tester platform and model, lower-level configuration and test-cell differences can lead to gaps and surplus in capacity that can result in costly interrupted production and idle equipment, respectively. For example, Company A and Company B might use the same model XYX having 512 pins, but Company A requires 100 Mbps speed and 8 Mbytes vector memory, and Company B requires 200 Mbps speed and 16 Mbytes vector memory. Without a way to discern and manage (e.g., specify, match, plan, etc.) these differences, the combined Company AB can experience issues related to overbuying, underutilization, and more. As suggested in this example, such issues aren't always more visible system level, but can be at the option or licensing level, yet still substantially impact margins over multiple test cells.

Merging companies often find the blending of test capacity at such low levels difficult because of a lack of common or compatible test capacity management tools. In my experience, companies indeed have some way of representing their test capacity, but largely using internally developed tools. Such tools are often built on familiar and widely available platforms such as Microsoft Excel, yet are limited in addressing the challenges related to the nuances of test capacity. Perhaps more relevant to this topic, however, no two implementations of an in-house Excel-based "configuration tracker" are the same. Different worksheet structures, formatting, taxonomies, and more are inevitable. Table 1 two real implementations of configuration trackers in Excel that might represent the Company A config (left) and the Company B config (right) mentioned earlier.

Table 1. No two implementations of in-house tester configuration trackers are the same.
Table 1. No two implementations of in-house tester configuration trackers are the same.
When two or more such disparate implementations intermingle, these tools no longer seem familiar and comfortable. This, of course, can happen when combining companies and operations in an acquisition, but unfortunately, also occurs every day within companies, and certainly between different companies in the test ecosystem (e.g., the fabless specifier and the OSAT provider).

Awareness of at least these two test-capacity issues can better prepare M&A parties for a more successful manufacturing-test integration. The parties must work together to not only deploy a common test capacity management platform, but can manage capacity at the lowest levels of the test-cell configuration. Including these ideas in the M&A integration plan can ensure that the expected synergies in test operations can be readily obtained.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Reengineering Software Re-engineering Software Reverse Engineering Software Reverse Development Software Change Modulation Software Conversion Software Re-creation Software Re-development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions