SANTA CLARA, Calif. -- It could be another tough year in the automatic test equipment (ATE) business, where the worldwide market is projected to be relatively flat in 2002 compared to 2001, said a top executive with Japan's Advantest Corp. in an interview this week.

But the Japanese ATE giant expects to grow its revenues by 10% in 2002 over last year's depressed sales. If so, that would be stronger than most forecasts for the entire test equipment segment.

In total, the worldwide ATE market fell a stunning 56.9%, from $6.5 billion in 2000 to just $2.8 billion in 2001, said Nicholas Konidaris, president and chief executive of Advantest America Corp. The Santa Clara-based company is the U.S. subsidiary of Japanese ATE giantAdvantest.

The Advantest executive implied that worldwide ATE sales could be flat to slightly down in 2002 over 2001. This year, worldwide ATE sales "will not exceed" the revenues generated in 2001, he told SBN on Monday.

"I think we will see a small improvement in the ATE industry in 2002 in relation to 2001," Konidaris said. "I think we will see small growth in the first half of 2002. I think we will see an acceleration of growth in the second half," he added.

Needless to say, the ATE industry suffered its worst downturn in history in 2001. In fact, test systems suppliers were clobbered the hardest by the industry's recession last year, based on a new Top 10 ranking of semiconductor equipment company from VLSI Research Inc. of San Jose.

Boston-based Teradyne Inc., for example, fell completely out of VLSI Research's Top 10, from the No.4 spot in 2000. Japan's Advantest slipped from No.7 to 10 as its sales plunged 50.5%, from $1.865 billion in 2000, to $924 million in 2001, according to the San Jose research firm (see Feb. 11 story).

In 2002, Advantest believes it will gain market share and grow faster than the industry average. Konidaris predicted that the company's worldwide sales rise 10% in 2002. "I'm optimistic," he said. "Inventories are going down. There is also a need for more technology buys in the market."

In the long term, though, ATE will remain a tough business, in which competition among vendors is expected to be "fierce," he said.

By 2004, for example, worldwide ATE sales will still not match or exceed the record revenues levels set in 2001, the Advantest executive added.