SAN JOSE -- Schlumberger Ltd. here outlined its strategy to divest itself from the automatic test equipment (ATE) business, saying the operation will be sold in pieces rather than as a whole to potential buyers.
The company's ATE business, Schlumberger Semiconductor Solutions, also refuted claims that its customers are in limbo as a result of the divestiture. Its ATE customers include the who's who in the semiconductor business: Advanced Micro Devices, Intel, Motorola, among others.
In February, Schlumberger, the French-based parent company of Schlumberger Semiconductor, announced it was attempting to sell the ATE business in order to focus more attention on its core activities in oil field services, smart cards, and other sectors.
The decision to sell the test systems business also came in the middle of the current downturn. In the first quarter of 2001, Schlumberger's ATE sales dropped 31% compared to the same period last year, according to the company.
At present, Schlumberger Semiconductor has seven major business units: automation equipment, metrology, probe systems, telecommunications ATE, test systems, verification, and yield enhancement systems.
Since the time that Schlumberger announced the sale of its ATE operations, the company has been looking to sell each one of those business units separately in order to find a suitable buyer for a given operation, said Jean Luc Pelissier, vice president of marketing and business development for Schlumberger Semiconductor, based in San Jose.
"We don't think there are many companies that will buy all seven units," Pelissier said. "We are looking to market and sell these businesses separately," he said in an interview.
The company also did not rule out the possibility of a leveraged buyout. Schlumberger is currently in talks with a number of companies concerning the sale of its ATE operations, but it declined to identity the potential suitors.
Meanwhile, Pelissier refuted that Schlumberger's ATE customers are in limbo as a result of the decision to sell the operations. "We are committed to support our customers," he said. "Our customers are aware of the progress we are making in terms of the sale of the ATE operations," he added.
As reported, after being put up for sale earlier this year, Schlumberger Semiconductor here is still on the block--a situation that should create some uncertainty for its ATE, most notably Intel Corp., according to industry observers (see June 19 story ).
For years, Schlumberger has been a key ATE supplier to Intel. Intel recently awarded Schlumberger a major contract to develop and ship a new line of low-cost testers, according to sources. Intel plans to use these testers as part of its new strategy to cut the overall cost of testing chips (see June 19 story ).
For now, however, Schlumberger's test unit remains on the block. If and when the operation is sold, it will end Schlumberger's long and turbulent history in the semiconductor business.
In 1979, Schlumberger entered the IC market by acquiring the pioneer in this business--the original Fairchild Semiconductor operation. The deal also included ATE pioneer and powerhouse Fairchild Test Systems.
The acquisition quickly turned into a disaster for the French company. Financial losses, high-level executive defections, and other factors caused Schlumberger to sell Fairchild's chip operations to National Semiconductor Corp. in the late 1980s.
Schlumberger kept the test operation, which was eventually re-named Schlumberger ATE in the late 1980s. By then, however, the company had lost its footing in ATE to competitors like Advantest, Agilent, LTX, Teradyne, and others.
In the 1990s, Schlumberger regained some of its past glory in ATE, but apparently not enough to remain in the business.