Semiconductor vendors are looking to ease the price pressure on testing solutions, which has been more pronounced in the memory segment as a result of high volumes of memory-based semiconductors in the market. In addition, key vendors are heavily focused on meeting the testing needs for next-generation technologies such as 5G and Artificial Intelligence (AI). Both 5G and AI are expected to provide new revenue streams and generate demand for high-end memory and non-memory testers, driving the growth for HBM, 3D NAND, graphic DRAMs, SoC testers etc. Among key end users, the automotive segment provides the highest growth potential for ATE vendors due to the integration of semiconductor electronics and the future assimilation of AI capabilities. These will drive testing requirements throughout the vehicle lifecycle for ensuring optimum performance and conformity with stringent safety standards, which are critical for functionalities such as Advanced Driver Assistance Systems (ADAS) in the automotive segment.
Geographically, China and Taiwan remain the strongest market for ATE vendors due to the high market demand and the presence of many Integrated Device Manufacturers (IDMs) and Outsourced Semiconductor Assembly and Test companies (OSAT) in the region. The overall market for testing is currently dominated by 3 to 4 major market participants that include Teradyne Inc., Advantest and Cohu Inc. All top participants have a strong customer base and geographic presence, although the market for discrete ATE continues to remain more fragmented due to the varying needs of testing. In the long term, open and modular test solutions such as PXI will gain higher traction for meeting the gaps in testing needs for flexible and cost-efficient testing. Vendors will need to focus on addressing the need for high-volume, multi-site and high-parallelism testing needs while simultaneously lower the overall testing cost for end users to achieve strong growth. In the next 2 to 3 years, market solutions will increasingly make use of cloud computing and edge computing to shorten the time to test and allow flexibility in testing.