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Technoprobe: Semiconductor Probe Card Testing Equipment

The shorter the product lifecycle, the faster a company has to move to remain relevant. And there are not many faster-moving industries than semiconductors. Moore’s law underpins a relentless pressure for all semi equipment suppliers and OEMs to innovate. This interview on Technoprobe, a probe card supplier, is the first in our series to understand the criticality and switching costs of various semiconductor equipment suppliers. 

Probe cards allow semi manufacturers to test chips on wafer. Each probe card, with typically ~50,000 probes (little pins) spaced one six-hundredth of an inch apart, sends electrical signals to the circuit and measures functionality. Probe cards are like acupuncture for wafers. The tiny probes touch the wafer and test electromechanical functionality of the chip.

The technical proficiency at such small scale is incredible:

Let's say a typical 12-inch wafer has 300,000 locations that need contact to run a full set of diagnostics. You have a probe card with 30,000 probes, so you need 10 touchdowns to fully test that wafer if it's perfectly efficient. However, it's probably not going to be perfectly efficient. There is typically some redundancy. On any given device under test, you might have 30 to 40 grounds, so all the contacts are grounded. Then there's a larger set of contacts used to evaluate some aspect of the logic in that IC. We always have to evolve and prepare for the next technology node. There's a lot of sophistication that goes into manufacturing the probe itself, and the challenges there are different from other parts of the manufacturing process. There's the contact metallurgy, mechanical performance, electrical performance, and feature sizes. They all contradict each other, but you have to satisfy all the requirements. - Former Senior Executive at Technoprobe

OEMs rely on two probe card manufacturers: Technoprobe and FormFactor. A true duopoly. Probe card testing is a critical process in chip manufacturing. The earlier chip defects are detected, the higher the manufacturing yield and lower the cost per chip. Probe card spending is a tiny fraction of semi OEM revenues:

Probe card suppliers benefit from being mission critical and a small % of the total opex of customers. However, the pressure of Moore’s law is a challenge. Probe cards increasingly must do more with less. The technical proficiency of each supplier must keep up with the OEMs innovation. This is expensive and runs the risk of being insourced or made obsolete by the demanding OEMs. 

I was observing increased collaboration between semiconductor manufacturers and probe card manufacturers. There was a need to develop more advanced materials at all levels, including electrical contact material, conductor material, mechanical material, and spring material. Advancements were required in all these areas, and there was a demand for a super material that could meet one or two of these needs with a single solution. Everyone was working hard to develop these materials. It's one thing to create the structure for a vertical probe, but achieving the desired feature sizes, yield, and consistency with these materials was a significant challenge, and a lot of effort was being directed towards it. - Former Senior Executive at Technoprobe

High switching costs are attractive, but only when paired with a long product lifecycle. This interview with a Former Technoprobe executive, who has over 30 years semiconductor experience, walks through the probe card testing process and the positioning of Technoprobe vs FormFactor. We plan to explore various different semiconductor equipment suppliers in 2025. Please reach out if you think any are particularly interesting for us to cover. 

Graco: Culture, Sales, & Distribution

Graco is an industrial leader of fluid-handling products that has compounded at ~20% per annum over the last 40 years. The company is a diversified owner of niche products embedded within manufacturing processes across construction, autos, and other industrial end markets. The company's combination of low volume and high product mix delivers high customer ROI. Over half of its revenue is driven by niche products sold at low volumes: 

This interview with a Former Graco VP, who has over 15 years experience at the company, explores Graco's industrial product portfolio and go-to-market strategy relative to competitors.

Danaher: Aldevron & DNA Plasmid Manufacturing

In 2021, Danaher acquired Aldevron for $9.6bn. In the 12 months before the acquisition, Aldevron generated ~$300m in revenue. In the first year post-acquisition, Danaher expected to earn $150m EBITDA on $500m revenue at Aldevron. At 64x forward EBITDA, Aldevron is a slightly different type of acquisition to what the old DHR was used to. 

Aldevron is a leading manufacturer of DNA plasmids, a critical raw material in protein and antibody production:

The plasmid is essentially a circular piece of DNA encoding a gene of interest. It is separate from the chromosomal DNA, which I mentioned is an impurity in the process. For antibody and protein production, you often start with a plasmid as well. You can think of plasmid production as a starting point for both protein and mRNA production, because mRNA production also requires a DNA template to begin with. The plasmid is a basic raw material used in various workflows. You introduce the plasmid into an E. coli strain, scale it up, and then purify it for final use. It can be used for numerous applications, such as protein and antibody production. - Former Senior Executive at Aldevron

This interview explores DNA and mRNA plasmids, the synergies between Cytiva and Aldevron, and the strategic value of Aldevron to DHRs long-term strategy.