Orbotech’s Outsourcing Twist

Contracting assembly certainly is nothing new around these parts. Semiconductor design firms routinely outsource waber fab and packaging. OEMs have sent out everything from systems design to circuit board layout to component assembly and test. Indeed, our sister magazine, CIRCUITS ASSEMBLY, has covered the electronics manufacturing services industry for 20 years.

But a new deal between Ultra Clean Holdings and Orbotech puts a slightly new twist on an old paradigm.
Under the agreement, Orbotech will outsource production of certain AOI machines to Ultra Clean. Given that designing and building AOIs is considered to be Orbotech’s core competency, it would appear that the OEM is rethinking even that part of its business model.

Are process equipment makers next to follow end-product OEMs like Cisco and IBM into full-scale outsourcing?