Ottawa startup to test fabless semiconductor products

An integrated circuit test facility is using some local IT history to launch its services for the Canadian fabless semiconductor companies.

Microsystems International Ltd. (MIL) Monday officially opened for business in Ottawa,

offering design for test expertise, test engineering support, production test program development and access to test equipment. The company uses the same name as one of the first 1970s-era semiconductor manufacturers, a company with which many Canadian firms will be familiar, executives said.

Tom Little, MIL’s president, said the company is starting off small with only four people but hopes to grow to between 10 and 15 employees this year. Its services will include industry-standard functional, structural and parametric tests. Little said he expects most of its initial business to come from the Ottawa area, home to firms like Zarlink Semiconductor (formerly Mitel semiconductor). Eventually, he said, MIL will look for customers in the United States and Europe.

“”There appears to be a demand, even with all the layoffs in the industry,”” he said. “”They still need engineering services. And there was some very good talent available.””

Little’s 20 years of experience in the industry includes work at Bell Northern Research, Northern Telecom, Gandalf, and a few startups.

“”I know the fabless model fairly well, having tried to look for these services on the other side of it,”” he said.

Iain Scott, president of the Strategic Microelectronics Council (SMC) within ITAC, said firms like MIL fill a void that has opened since the industry has moved from local to fabless manufacturing, where products are created by a third party. Semiconductor firms usually spend a considerable amount sending products to California or the Far East to be tested, he said.

“”Part of that transition (to a fabless model) requires that we build the infrastructure to support that new business model,”” he said. “”One of the missing links was the ability to get access to contract testing capabilities.””

Little said MIL may seem more credible to the industry because it is operating as a standalone entity.

“”People have tried to do this within other companies,”” he said. “”It’s very difficult to do that because their own products’ interest always takes priority over the external.””

Scott said there were a number of barriers to entry for the IC test market that have prevented the launch of company like MIL.

“”The cost of the test is very significant, although it is several orders of magnitude smaller than worrying about setting up a wafer fab,”” he said. “”A wafer fab is a $2.5 billion investment nowadays, whereas the tester is probably less than $10 million of capital. But $10 million is still a lot of money.””

The SMC did a survey a few years ago that suggested the market was big enough to carry more than one such facility. “”Since then we’ve had the downturn and consolidation, but I’m sure once the business picks up there will be opportunities for others as well,”” Scott said.

MIL has one customer already, whom Little would not name.

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