From the ashes of RISC microprocessor manufacturer Ross Technology Inc., BridgePoint Technical Manufacturing has emerged with a charter to bring new levels of service to the growing outsourcing industry.
BridgePoint was created by former employees of Austin, Texas-based Ross, and is focused on providing semiconductor testing and manufacturing services, primarily for small and emerging fabless semiconductor companies.
BridgePoint also plans to work with larger semiconductor companies to provide testing services for small-volume projects or those in which a high level of technical competence is needed, said Joe David Jones, president and chief executive of the Austin-based company.
"We don't fit into any real category," Jones said. "We're a test house. We're a contract manufacturer. But what we really are is the triage unit on the battlefield. We make sure the patient gets to the big operation alive."
Quite often, BridgePoint works as an intermediary between the semiconductor manufacturer or OEM with a specialized or prototype project, and the large-scale offshore foundries, test houses, and full-service contract electronics manufacturers.
"We are the 'bridge point,'" Jones said. "We're helping get these projects to the other side."
BridgePoint's current mission represents a significant change from its origins within Ross.
Ross underwent several incarnations as a designer and manufacturer of microprocessors, primarily for Sun Microsystems Inc. During the past decade, ownership of Ross passed from Cypress Semiconductor Corp. to Fujitsu Ltd., an independent entity that completed a $60 million IPO in 1995.
Despite some cycles of success, historically Ross struggled, and early in 1998 was on the market looking for a new buyer.
In July, the BridgePoint management team, backed by venture-capital funding, bought the manufacturing arm of Ross; this included a 35,000-sq.-ft. plant, test-and-analysis equipment, and the manufacturing line that was used to build Ross' SPARC microprocessors.
BridgePoint intends to continue supplying microprocessors to existing customers while it ramps its outsourcing services.
In its first fiscal year, from July 1998 to June 1999, BridgePoint expects revenue of about $16.3 million, primarily through sales of microprocessors. To date, the company has $11.7 million in revenue shipped or booked, Jones said.
Over the next two years, revenue is expected to shift primarily to test and related services, and microprocessors sales are expected to slowly disappear. Jones believes that by 2000, BridgePoint can be well established as a service provider, tapping particularly into the growing market for outsourced semiconductor-testing services.
According to a Smith Barney/Salomon Brothers study, worldwide revenue for outsourced testing is expected to grow from an estimated $300 million in 1996 to nearly $2 billion by 2001.
"It used to be that a company could buy a $250,000 tester and send a guy to the back room to complete test development," Jones said. "Now, that equipment is $2.5 million, and we're all working with devices that have 23 million transistors or more.
"We've seen the previous waves of outsourcing for assembly, and wafer fabs, and the same is happening with testing," he said.
The highest-volume testing will go to offshore test facilities, primarily in Asia, Jones said. High-end, low-volume testing is likely to remain in the United States.
"You just can't fly guys to Malaysia with silver briefcases every other day when you're trying to get front-end learning cycles completed," he said. "There are numerous fabless semiconductor companies out there that may have two products a year, and they don't want to make investments in capital equipment we've already paid for, and they don't have to invest in a team to understand this part of the equation, which is going to be idle between designs."
BridgePoint also has surface-mount and through-hole board-level assembly capabilities for the production of small-volume and prototype subassemblies and systems.
In addition, the company has semiconductor packaging capabilities to meet small-volume requirements.
To date, BridgePoint's customers include ESS Technology, Semi Dice, Silicon Labs, and Solectron.