"I looked at seven companies, three of them seriously. It was a really hard decision, but I had to go with my experience at TI. It would have been hard for other companies to exceed my expectations," said Lee, who decided to edge toward sales, taking a technical sales position job at Texas Instruments (TI; Dallas).

Lee's experience points up a change in the time-tested technique of companies giving interns a test run to see if their cultures and attitudes mesh. Companies have become more selective, forging close links with a limited number of schools and focusing on top interns. Engineering students would do well to notice which companies are providing products and funding to their departments, because there's a good chance many of them will end up working for the companies that want to be involved with the schools that will feed their technical staffs.

"It is a definite trend; industry is seeing a problem with the quality and number of graduates with the skills they want," said Bruce Kramer, director of the National Science Foundation's (NSF's) division engineering education centers (Arlington, Va.). Companies are "starting outreach programs [and] working closely with the universities. They can't do that with all the universities, so they focus on a few where they can make an impact."

For example, Cadence Design Systems Inc. (San Jose, Calif.) has forged links with California State University at Long Beach and with the University of Texas at Austin, providing both with funding and support personnel. And IBM Corp.'s Extreme Blue program offers high-powered internships to top candidates in specific fields.

Once these company-university relationships are in place, internships and co-ops usually lead to a job offer. TI offered jobs to 75 percent of its most recent crop of 600 interns, and 85 percent accepted the offers. "The closer your relationship with the university, the more you know the professors and understand the curriculum," said Rob Cummins, group director of the Cadence University and Technical College Program (San Jose, Calif.). "If they use our tools, it will save us time, we don't have to do as much [on-the-job] teaching."

While companies benefit from hiring students familiar with their products, most contend that such a close link isn't mandatory. What companies are really interested in is real experience with similar technologies, some say.

"Our focus is not just on Cadence tools, but on people who have tried some type of EDA tools," Cummins said.

Internships have long been used as trial runs, and there's evidence of their increasing importance. Studies by the National Association of Colleges and Employers (Bethlehem, Pa.) show that 46 percent of those hired from the class of 2000 by companies in all types of industries had participated in the employer's intern or co-op program. Another survey reported that 59 percent of college students have done internships and co-ops in their field. Most feel the programs are worthwhile.

"The internship helped a lot when I was looking for permanent positions," said TI newcomer Lee.

Observers say that the increased focus on a few universities is an obvious route for corporations. Even before the current downturn, many companies began revising their strategies.

"Probably there was a realization that [a company's] portfolio might look nice when funding went to 27 organizations, but the outcome was less than stellar," said Bruce Taber, foundation and corporate relations consultant at NSF. "When they focus on a few universities, the outcome and assessment level is much better. It's wise to limit funding to a smaller number and to fund it fully."

Taber cautioned that universities have to consider the impact of becoming too closely linked to a specific company or industry. "If there is one caveat, it's that when universities are sculpting these ties to industry, they should keep their eyes open to where it might lead," he said. "I haven't heard of any particular examples of universities becoming boutiques for a particular company or industry segment. The upside benefits are much greater than the downside risks."

With technology growth expected to continue while the number of engineering graduates is staying fairly flat, some say companies can't ignore thousands of graduates from hundreds of schools. Though companies are tightening their links with select universities, they say that won't limit their hiring to just those schools.

"Not at all; we hired 49 grads from other schools this year," Cadence's Cummins said. "Probably 50 percent of our new graduate hires come from the schools that we are close to."

Regardless of where the students come from, some companies feel that working with universities helps professors teach students to be better suited for the work force. Some observers feel that students today are better prepared than in the past to hit the ground running when hired.

"Industry is working closely with schools to let them know what we need," said Tegwin Pulley, workforce development, diversity and work-life strategist at Texas Instruments. "That has helped schools prepare the students. Overall, we've been very impressed with the quality of graduates we've been getting."

However, not everyone is enamored with the changes of the past few years. NSF has spent much time working on curriculum changes and has funded many programs, augmenting what's being done by industry. But there's some question whether it is yet having the desired impact.

"I still have huge concerns about education and hiring people," said Ron Woan, senior software engineer in IBM's Extreme Blue program (Cupertino, Calif.). "I hire predominantly software people and EEs, and find that many students worry about the functionality of their work, but don't pay any attention to the longevity or reliability of their work. Many do not understand systems of the context necessary for large programs like the ones we undertake."

But there's no sign that the relationship between universities and industry will change. IBM's Extreme Blue program, in which top students are wined, dined and introduced to top executives during their internships, is viewed as such a success that its numbers have doubled throughout its three-year history. Next year, it should incorporate about 200 interns.

IBM hand-picks the candidates, so it's no surprise that most of them get job offers when their internships end. But often, the students opt for further education, stretching the possibility of employment at IBM out a few years.

"We extend offers to the majority of our candidates; they are very, very strong candidates," said Leslie Givens, program director for IBM's Extreme Blue program. "About half of them accept. Of those who don't accept, the majority go on for master's degrees. Often they come back to IBM when they finish."