Cost impacts of automatic test equipment purchase decisions

Because modern semiconductor test equipment may cost millions of dollars per unit, the common perception is that test equipment costs are a major portion of the cost of a semiconductor device shipped. Using a computer model which identifies many of the cost components in the production of semiconductor devices, the author shows that test equipment costs are a very small percentage of the total cost of a device. He examines the cost of production per device, using many identifiable costs and including them in the model. More important, the costs incurred before a device arrives at the test site are included in the calculations. Other costs, such as labor overhead, and associated capital costs, are also included. The author shows that the performance of the test equipment has a much larger financial impact than the cost of the equipment