SANTA CLARA, Calif. -- Amid an apparent slowdown in its IC-packaging and assembly business, ChipPAC Inc. here today announced that it has acquired Viko Test Labs from its parent company, Viko Technology Inc., for an undisclosed amount.
With the acquisition of Viko Test Labs, based in Santa Clara, Calif., ChipPAC will significantly boost its internal IC-test capacity. Viko Test Labs provides IC-test, burn-in, failure analysis, wafer sort, and other services for chip makers. The company has facilities in both Santa Clara and Austin, Texas.
It also gives ChipPAC some new and key accounts. Viko Test Labs provides IC-test and other services for PMC-Sierra, Xilinx, and other chip makers, according to a spokesman for ChipPAC, also based in Santa Clara.
The deal underscores a trend among several back-end assembly houses to enter or expand their efforts in the booming IC-test market. In addition to ChipPAC, Amkor, Orient, Siliconware, and other chip-packaging concerns are all paying more attention to IC-testing services in an effort to provide a one-stop shop for customers.
And at the same time, the chip makers themselves have been shifting more and more of their internal IC-test capabilities to third-party providers in order to lower their costs in this critical area.
ChipPAC, a provider of IC-assembly and packaging services, is also ramping up its internal IC-test capabilities to meet this anticipated demand. In addition to facilities owned by Viko Test Labs, ChipPAC also provides IC-testing services in several locations, including China, Korea, Malaysia, and Santa Clara, the spokesman said.
"Acquiring Viko Test Labs allows us to immediately and more effectively support customers who need to quickly produce complex prototype chips," added Dennis McKenna, president and chief executive of ChipPAC.
"With our expanded capabilities, customers can reduce their manufacturing cycle and time-to-market for technologically advanced products," McKenna said. "It [also] expands our U.S. presence, provides access to key new customers, and expands our staff of proven technical personnel," he added.
It will also help the company's bottom line, he said. "This acquisition further strengthens ChipPAC's ability to capitalize on the nearly 40% per year growth projected for outsourced test, and is a significant step toward our goal of doubling our test revenue over the next few years," he added.
In a separate announcement, ChipPAC today said that it expects net sales for the fourth quarter, ended Dec. 31, to be approximately $128 million, with net income of about $0.03 per share. This would represent an 18.6% increase over revenues of $107.9 million for the fourth quarter of last year.
However, the company will fall short of its previous forecast. It was expected to earn $0.18 a share in the quarter, according to estimates from First Call/Thomson Financial.
"We expect that annual revenue growth for fiscal 2000 will exceed 30%," McKenna said. "While we continue to be encouraged by the growth we are experiencing in our chip scale multi-die package solutions and power products, the gains have not been enough to fully offset the short-term weakness we are seeing in the wireless and computing end-markets markets when combined with end of the year inventory adjustments by several of our customers," he said.
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