The ATE market--like just about every chip industry segment--suffered its worst downturn in history last year. The worldwide ATE business fell 64.2% last year, from $6.7 billion in terms of sales in 2000 to just $2.4 billion in 2001, according to analysts at VLSI Research Inc. of San Jose.

Overall, the worldwide ATE market is expected to show little or no growth in terms of sales for 2002, said Pascal Ronde, vice president of globalsales, marketing and support for the Automated Test Group at Palo Alto-based Agilent. "If you look at revenues for ATE in 2002, it will be the same as 2001," Ronde told SBN at an event for press and analysts on Monday evening.

On the other hand, Agilent is expected to perform better than the industry average, according to the vice president. "Our business is picking up in terms of semiconductor test," he said. "We grew 155% from Q1 of 2002 over Q4 of 2001. I haven't announced this type of growth for a long time," he said at the briefing on Monday evening.

Last month, the company reported a net loss of $315 million for all of its businesses in its fiscal first quarter, ended Jan. 31. The loss included charges of $105 million restructuring and $96 million of non-cash goodwill and amortization charges. Agilent's revenues dropped 11.2% sequentially to $1.43 billion in the quarter compared to $1.61 billion in the prior three-month period (see Feb. 19 story).

But now the company is seeing better times ahead for test systems. The company attributed the growth in ATE to several factors, including an uptick in orders at the test subcontractors in Taiwan. The company is also benefiting from its strong ties to Nvidia Corp. and other suppliers of chip sets and graphics chips, according to analysts.

For some time, Agilent's 93000 line of SoC testers have been the main and "qualified" ATE platforms to test Nvidia's graphic chips. The Santa Clara, Calif.-based chip maker has a large portion of its test requirements handled in Taiwan by ASE, Siliconware, and others. Agilent reportedly has a large installed base at these test houses, according to sources.

Executive from Agilent did not disclose its customers, but dropped hints that it is benefiting from a boom "in the graphics and chip set" segments. "We see strong growth for ATE in chip set and graphics," Ronde said.

"We've had an alliance for a long time with Nvidia," he said. "But we have other customers besides Nvidia."

While the test subcontractors appear to be ordering ATE, the integrated device manufacturers (IDMs) are showing little interest in buying testers due to excess capacity-at least for now, he said.

Another bright spot is the company's manufacturing test group, which sells in-circuit testers as well as optical inspection and X-ray equipment, he said.

And the Agilent executive took a shot at rival Teradyne Inc., a Boston-based supplier of ATE that recently acquired GenRad Inc. Teradyne acquired GenRad to bolster its efforts in PCB test.

"The recent acquisition of GenRad by Teradyne validates what we've been doing all along," he said. "We think we're two years ahead of them. It's going to take Teradyne and GenRad awhile to catch up."